CH TREASURES NM (02439) has announced that the Group expects to record a net profit attributable to equity holders of the Company for the six months ended 30 June 2026 of not less than RMB 17.0 million, representing a decrease compared to approximately RMB 35.8 million for the six months ended 30 June 2025.

The anticipated decline is primarily attributed to a reduction in gross profit resulting from lower revenue, which is mainly due to a decrease in sales volume of biodegradable plastic shopping bags. Additionally, depreciation of property, plant and equipment increased during the period, largely driven by the completion of the new production base in the Jiutai Economic Development Zone in Changchun. These impacts were partially offset by a reduction in research and development expenses, as major projects were completed in 2025.

Where to begin: The company's financial performance is expected to be adversely impacted by the decreased sales volume and higher depreciation costs, despite some mitigation from lower R&D spending. The new production base is now fully operational, which contributes to the increased depreciation charges during the period.