Magnesium Technology (00601) is forecasting a net loss of approximately HK$45 million to HK$65 million in the medium term

According to Zhitong Finance App, Magnesium Technology (00601) announced that the Group expects to record a net loss of approximately HK$45 million to HK$65 million in the first half of 2026, while a net loss of approximately HK$65.3 million will be recorded for the six months ending June 30, 2025 (first half of 2025). As a result, the Group's net loss forecast for the first half of 2026 is roughly similar to the first half of 2025.

The Group expects revenue for the first half of 2026 to be approximately HK$30.5 million, a decrease of about 67.5% compared with the same period last year. The decline in earnings is mainly due to a decrease in sales volume of magnesium products, while the market environment in the magnesium industry continues to weaken, the pattern of strong supply and demand continues to be weak, and magnesium prices continue to be under pressure. In the first half of 2026, the Group expects to still record gross losses, in line with the first half of 2025, but the amount of gross loss is expected to narrow as the scale of sales declines. As a result, the Group's net loss forecast for the first half of 2026 will be roughly the same as the first half of 2025.

Furthermore, recently, Xinjiang Tengxiang received a rectification notice from the Hami High-tech Industrial Development Zone Management Committee, requiring it to fully implement requirements relating to ecological and environmental protection. In order to respond to and cooperate with regulatory requirements, Xinjiang Tengxiang plans to arrange for the temporary suspension of production during the facility upgrade period to ensure compliance with relevant regulatory requirements.

In view of the fact that the Group has been deeply involved in the magnesium metal industry for more than ten years and has established long-term good partnerships with suppliers and customers, during the upgrading and discontinuation of production of the Tengxiang Lantan production plant in Xinjiang, the Group will make full use of its resource advantages to maintain business operations through continuous magnesium product trade and contract processing arrangements to ensure that customer needs are met. As the price of magnesium ingots continues to hover low and production costs are higher than market prices, the temporary suspension of production is expected to drastically reduce fixed expenses and provide room for the Group to reduce costs and increase efficiency.

As for Baishan Tianan Metal Magnesium Mining Co., Ltd., another major operating subsidiary of the Group, the company has introduced new investors to fund the construction of a magnesium ore powder production line. The production line is now officially in commercial operation. The commissioning of the new facility is expected to broaden the Group's business channels and make a positive contribution to the Group's magnesium business revenue.

The Board of Directors reaffirmed its commitment to maintaining stable operations and safeguarding shareholders' interests during the current adjustment phase. The Company will continue to take steps to strengthen the Group's financial resilience, improve operational efficiency, and ensure compliance with all applicable regulatory requirements.