Kelfred Holdings Limited reported a HK$12.08 million net loss for the six months ended 30 June 2026, deepening from a HK$4.72 million loss a year earlier, as weaker selling prices and higher renminbi-denominated costs eroded profitability.

Revenue slipped 9.5% year on year to HK$219.60 million, reflecting softer demand—particularly in Europe—and intensified competition that drove average selling prices lower. Europe remained the group’s largest market, with Italy (HK$70.81 million) and the UK (HK$55.42 million) together accounting for over 57% of total sales.

Cost of sales fell 7.0% to HK$196.62 million, but not enough to offset the topline contraction; gross profit contracted 26.4% to HK$22.98 million and gross margin narrowed to 10.5% from 12.9%. Selling and distribution expenses climbed 41.3% to HK$10.19 million, primarily on higher advertising and promotion outlays, while administrative and other operating costs were stable at HK$27.68 million. Finance costs eased 20.1% to HK$1.24 million due to reduced receivables factoring.

The company booked a HK$0.14 million income-tax credit versus a HK$1.30 million expense in the prior-year period, reflecting a shift from a temporary assessable profit to a loss position.

At 30 June 2026, total assets stood at HK$257.30 million, down from HK$282.80 million at end-2025, while net assets slipped to HK$141.68 million. Cash and bank balances fell to HK$29.88 million from HK$48.00 million six months earlier, mainly due to operating cash outflows, capital expenditure and lease payments. The gearing ratio was 5.3%, marginally lower than 5.7% at year-end 2025, and the group remained in a net cash position; current and quick ratios improved slightly to 2.0x and 1.4x respectively.

Capital commitments were minimal at HK$0.19 million, and the group reported no pledged assets or significant contingent liabilities during the period. Post-period, Kelfred secured two short-term PRC bank loans totalling RMB23.95 million (about HK$25.52 million) against certain land and buildings to enhance working capital.

Operationally, Kelfred maintained two manufacturing sites in Shenzhen and Jiangxi and confirmed that a third facility in Thailand is scheduled to commence production in 2H 2026. Management reiterated its focus on cost-saving initiatives, supply-chain optimisation and product innovation while continuing to explore diversification opportunities to mitigate market uncertainties.

Given the interim loss, the board declared no interim dividend.