Tongfang Tide (01206)'s profit warning expects mid-term losses to increase to about 255 million yuan to 265 million yuan to 265 million yuan year-on-year

According to the Zhitong Finance App, Tongfang Tide (01206) announced that the Group expects to lose between RMB 255 million and RMB 265 million for the six months ending June 30, 2026, and a loss of approximately RMB 7.7 million for the six months ending June 30, 2025.

The increase in losses during the six-month period ending June 30, 2026 is mainly due to: 1) Due to the slowdown in macroeconomic growth and cyclical adjustments in the industry, effective demand in the target market was insufficient, and investment in non-rigid and improved construction projects contracted significantly, leading to a sharp decline in the group's revenue scale and a significant impact on contract energy management project revenue; 2) increasingly intense market competition, narrowing project negotiation space, and pressure on the Group's profitability. In addition, contract energy management projects are the Group's traditional high-margin business, and the reduction in revenue scale directly led to a decline in total gross profit. At the same time, fixed expenses such as project labor costs were not reduced in the same proportion, further eroding the gross profit level, leading to a sharp decline in gross margin for the current period; 3) After comprehensively considering changes in the industry environment and future operating expectations, the Group increased its impairment provisions for some assets, further increasing net losses during the period.