JIAHUA STORES H (00602) has issued a profit warning, indicating that its net loss for the six months ending June 30, 2026, is expected to expand significantly to a range of approximately RMB 38 million to RMB 42 million.

Based on a preliminary review of the group's unaudited management accounts for the period and an assessment of the latest information available to the board, the projected net loss marks a substantial increase from the approximately RMB 3.6 million (unaudited) recorded in the corresponding six-month period ended June 30, 2025.

The anticipated rise in the net loss is primarily attributed to three key factors. Firstly, the group has experienced a decline in gross profit margins following the renovation of all its stores, as efforts to boost sales have come at a cost. Secondly, rental income from subleased shops and shopping centers has decreased, driven by intensifying market competition and a stagnant local economic environment. Thirdly, the current period does not include the gain from the early termination of leases that was recognized in the previous year.