CHU KONG PIPE (01938) has issued a profit warning, projecting a consolidated net profit of no less than RMB 40 million for the first half of 2026. This compares to an audited consolidated net profit of RMB 246 million for the year ended December 31, 2025, and an unaudited consolidated net profit of RMB 172 million for the six months ended June 30, 2025.

The anticipated decline in profitability is attributed to heightened geopolitical tensions and instability in the Middle East, which have caused delays in the group's steel pipe deliveries during the first half of 2026. Despite these headwinds, the board remains cautiously optimistic, citing the development of the oil and gas sector under China's 15th Five-Year Plan, alongside the country's ongoing emphasis on energy security and the promotion of clean energy, as factors expected to accelerate pipeline infrastructure construction and drive demand for the group's products.

Furthermore, the company believes that once stability returns to the Middle East, the repair or construction of new oil and gas pipelines will increase substantially, bringing greater benefits to the group. The group anticipates that revenue linked to the delayed deliveries will be recovered after the regional situation stabilizes.