CREALITY (03388) issued a profit warning, projecting a net loss attributable to shareholders of approximately RMB 53 million to RMB 63 million for the first half of 2026, compared to a net profit of about RMB 107 million in the same period of 2025.

To supplement financial data prepared under International Financial Reporting Standards (IFRS), the group expects an adjusted net loss (non-IFRS measure) of roughly RMB 10 million to RMB 20 million for the first half of 2026.

The board attributes the swing from profit to loss primarily to several factors. Firstly, the group's gross profit margin declined due to increased promotional efforts and price discounts aimed at expanding overseas market coverage, combined with product portfolio optimization and inventory clearance related to product upgrades. Secondly, marketing and advertising expenses rose as the group expanded its online direct sales business and strengthened brand marketing and promotional activities through offline channels to broaden customer reach, including fees paid to third-party e-commerce platforms, offline stores, and channel partners. Thirdly, research and development expenses increased due to greater investment in technology R&D projects and an expanded R&D team, leading to higher personnel and material costs. Finally, the group incurred foreign exchange losses in the first half of 2026 due to exchange rate fluctuations from the sustained appreciation of the renminbi against the US dollar.