Herbs Generation Group Holdings (2593) investor relations material

Executive summary

• H1 2026 revenue fell 6.2% YoY to HK$110.013m; net loss narrowed to HK$3.710m from HK$7.535m, mainly on lower advertising and promotion costs.

• Retail weakness in a competitive market was partly offset by higher wholesale sales; gross margin increased to 71.0% from 70.5%.

Financial highlights

• Gross profit declined 5.5% to HK$78.121m from HK$82.643m; gross margin rose to 71.0% from 70.5%.

• Operating loss narrowed to HK$3.700m from HK$8.503m; loss before tax was HK$4.120m versus HK$9.086m.

• Selling and distribution costs fell 16.6% to HK$55.447m; administrative and other operating expenses increased 1.6% to HK$27.173m.

• Basic and diluted loss per share improved to HK2.78 cents from HK5.65 cents; income tax credit was HK$0.4m versus HK$1.6m.

Outlook and guidance

• Plans to develop additional products and upgrade existing products in H2 2026, targeting lower full-year losses in 2026 than in 2025.

• Capital expenditure is expected to rise with business growth, principally for property, plant and equipment, funded by operating cash flow and listing proceeds.