Touyun Biotech swings to HK$310.80 million interim profit on investment revaluation; liquidity pressure remains

Bulletin Express
Aug 28

Touyun Biotech Group Limited reported a sharp turnaround for the six months ended 30 June 2026, booking profit from continuing operations of HK$310.80 million compared with HK$36.19 million a year earlier. Profit attributable to shareholders surged to HK$197.85 million (HK7.05 cents per share) from HK$11.24 million (HK0.40 cents).

The gain was driven by HK$349.82 million of other income, gains and losses, comprising HK$194.16 million fair-value appreciation on listed equities and HK$154.51 million on unlisted stakes. Core revenue slipped 3.3% year on year to HK$35.39 million and gross profit margin contracted to 25.8% from 37.0%, reflecting a deliberate shift to higher-volume, lower-margin pricing and rising renminbi-denominated costs.

Segment performance • Packaging products: Revenue fell 6.4% to HK$30.62 million; segment loss narrowed to HK$3.90 million. • Treasury investments: Segment profit jumped to HK$348.43 million on sizeable mark-to-market gains. • Chlamydomonas reinhardtii (micro-algae) products: Revenue rose to HK$4.77 million; segment loss reduced to HK$11.63 million. The QR-code packaging operation was disposed of in 2025 and no longer contributes to results.

Balance-sheet developments Total equity climbed to HK$332.63 million from HK$27.39 million at end-2025, mainly on revaluation gains. Nonetheless, the group remained in a net current liability position of HK$542.17 million and carried HK$474.37 million of short-term bank and other borrowings, of which HK$173.75 million in principal and HK$20.73 million in interest were past due at period-end. Cross-default clauses rendered a further HK$37.77 million immediately payable. Cash and cash equivalents stood at HK$4.39 million, producing a 63% net-debt-to-capital ratio (31 December 2025: 94%).

Management has secured non-repayment undertakings from a director and a shareholder covering HK$104.43 million of advances and is negotiating loan extensions while exploring asset sales and new financing. The interim financial statements have been prepared on a going-concern basis.

Post-balance-sheet events • 12 July 2026: Completed an HK$8.00 million acquisition of a Hong Kong holding company with a 59.80% stake in a mainland new-materials producer. • 25 August 2026: Agreed to place 123.00 million new shares at HK$0.122, targeting net proceeds of HK$14.99 million for working capital; completion pending. • A HK$26.00 million loan became overdue after period end, triggering cross-default on a total of HK$73.90 million. Discussions with the lender are ongoing, which has granted a temporary standstill.

No interim dividend was declared.

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