China Environmental Technology Holdings Limited (CHINA ENV TEC) reported interim results for the six months ended 30 June 2026, showing a smaller net loss despite lower revenue, while leverage and liquidity pressures intensified.

Revenue and Profitability • Revenue slipped 5.9% year on year to HK$17.87 million (1H25: HK$18.98 million), reflecting softer sales in both core business lines. • Gross profit rose 15.14% to HK$6.39 million, lifting gross margin to 35.75% (1H25: 29.24%) on the back of cost-control initiatives. • Loss attributable to owners narrowed 18.61% to HK$24.08 million; basic and diluted loss per share improved to HK7.03 cents from HK8.64 cents. • Finance costs increased 2.9% to HK$15.35 million, driven by HK$3.68 million of default interest linked to a disputed 2021 convertible bond. • Other net loss widened to HK$7.32 million (1H25: HK$5.84 million), mainly due to HK$8.29 million in foreign-exchange losses, partly offset by a HK$0.97 million gain on disposal of a Ningxia new-energy subsidiary. • A HK$3.38 million reversal of trade-receivable impairment supported the bottom line.

Segment Performance • Wastewater treatment: Revenue HK$16.75 million (-6.1% YoY); segment loss reduced to HK$0.76 million (1H25: HK$4.02 million). • Energy management: Revenue HK$1.11 million (-1.9% YoY); segment loss narrowed to HK$0.47 million (1H25: HK$5.09 million). • Healthcare: No revenue; segment loss widened to HK$7.86 million (1H25: HK$5.65 million) due to operating costs.

Balance-Sheet Pressure • Cash and bank balances fell to HK$0.30 million (31 Dec 2025: HK$1.69 million). • Net current liabilities expanded to HK$546.37 million (31 Dec 2025: HK$521.98 million); net liabilities increased to HK$738.04 million (31 Dec 2025: HK$703.88 million). • Total borrowings stood at HK$171.47 million, with HK$93.28 million due within 12 months. Overdues included HK$53.06 million in entrusted loans, HK$2.42 million in other loans and HK$3.00 million in bonds. • Trade and other payables rose to HK$586.70 million (31 Dec 2025: HK$553.49 million), incorporating HK$112.98 million payable to the subscriber of the contested 2021 convertible bonds, which were restated following a Hong Kong High Court judgment.

Restatement of Prior Financials The group restated comparative figures for 1H25 and FY25 to recognise liabilities arising from the 2021 convertible bonds, increasing prior-period payables by HK$66.80 million (30 Jun 2025) and HK$70.24 million (31 Dec 2025).

Going-Concern Uncertainty Management flagged “material uncertainties” over the Group’s ability to continue as a going concern, citing significant short-term debt, minimal cash and ongoing litigation related to the 2021 bonds. Mitigating actions include: 1) expanding wastewater and energy-management contracts; 2) engaging advisers for potential fund-raising (bonds, convertible bonds or placements); 3) seeking loan renewals, debt deferrals and restructurings; 4) negotiating settlement of the disputed convertible bonds; and 5) securing a HK$130 million shareholder support pledge for at least 15 months from 31 March 2026.

Capital Structure and Share Options The issued share capital remained at 342.70 million shares. Outstanding share options totalled 10.81 million, equal to 3.15% of issued shares, exercisable at HK$0.50 and expiring in May 2030.

Dividend No interim dividend was declared.

Outlook Management expects ongoing policy support for environmental protection, wastewater upgrades and green energy to offer growth opportunities, but emphasises prudent cost control, business model optimisation and financing initiatives to stabilise operations amid elevated leverage and liquidity constraints.