Key Takeaways:
Eagle Nice (02368.HK) expects its net profit for the fiscal year 2026 to fall by a maximum of 30 percent year-over-year.
The company said in a statement that its performance deteriorated markedly in the second half of the fiscal year due to multiple external pressures.
The profit warning stems from US tariff policies on goods from Southeast Asian countries, where the company has production facilities, which led to higher production costs. The company also noted that brand customers have adopted a more conservative approach in price negotiations, squeezing gross margins. A continued appreciation of the Chinese yuan further elevated operational costs.
The announcement signals significant headwinds for the export-oriented manufacturer, reflecting broader geopolitical and currency risks facing companies with production in the region. The stock was down 1.35% in recent trading.
The combination of US tariffs and a stronger yuan creates a two-front challenge for Eagle Nice, increasing its cost of goods sold while its revenue is pressured by cautious clients. This dynamic is a key concern for Hong Kong-listed manufacturers that rely on production bases in Southeast Asia to serve US markets.
The company's dividend history shows a recent final dividend of HKD 0.0400 for 2025, and investors will be closely watching how the expected profit decline affects future payouts. The next major catalyst will be the official annual results announcement for the year ended March 31, 2026.
This article is for informational purposes only and does not constitute investment advice.
