Merida Industry (9914) Q2 2026 earnings summary

Executive summary

• Revenue for 1H 2026 was NT$12,261,752 thousand, down 16% year-over-year, but profitability improved sequentially with EPS at 2.15 (Q1: 1.09, Q2: 1.06), driven by growth in Taiwan, China, and European subsidiaries.

• Net profit for the six months was NT$665,325 thousand, a 26% decrease from the prior year, while total comprehensive income was NT$846,700 thousand, compared to a loss previously.

• Market demand recovered in Europe and China, supporting sales growth for subsidiaries, while new product launches and expanded customization offerings aided premium market penetration.

Financial highlights

• Group revenue declined 16% year-over-year, but subsidiaries in Europe and China showed notable sales growth.

• Gross margin improved to 18.2% in Q2 2026 (up from 16.6% in Q1), with a six-month average of 17%.

• Inventory levels have declined since 2024 but remained high at NT$8,062,518 thousand as of June 30, 2026.

• Profitability improved YOY for Taiwan HQ (+48%), China (+39%), and global sales companies (+49%).

• Cash and cash equivalents increased to NT$4,656,199 thousand as of June 30, 2026.

Outlook and guidance

• Market inventory destocking is nearly complete, with moderate growth expected as new models stimulate demand.

• Management is assessing the impact of new IFRS standards effective from 2027 and 2028, with no early adoption planned.

• 2026 is expected to mirror 2025 in terms of effective tax rate and regional profit distribution.