Tan Chong International Ltd reported a sharp turnaround in earnings for the six months ended Jun 30 2026, with profit attributable to equity shareholders surging to HK$81.94 million from HK$11.68 million a year earlier, despite a 5.4% year-on-year drop in group revenue to HK$6.16 billion. Management linked the rebound chiefly to higher contributions from the transportation and financing businesses, which offset weaker automotive sales.

Basic and diluted earnings per share rose to 4.07 Hong Kong cents from 0.58 cents. The board declared an interim dividend of HK$0.025 per share, up from HK$0.02 a year earlier; the payout will be made on 24 September 2026 to shareholders on record as at 11 September 2026.

Operating profit increased 16.9% to HK$385.47 million, lifting the operating margin to 6.3% from 5.1%. Consolidated EBITDA improved 9.7% to HK$738.73 million. Finance costs declined 22.5% to HK$74.52 million, helping drive a 33.2% rise in profit before tax to HK$312.04 million.

Segmentally, motor-vehicle distribution revenue fell 24.8% to HK$1.26 billion amid softer Nissan and Subaru sales in Singapore and across Greater China. Heavy commercial vehicle and industrial-equipment sales eased 1.9% to HK$58.10 million. Property rentals and development grew 6.9% to HK$62.94 million. Transportation revenue—largely from Japan-based ZERO Group—edged up 0.5% to HK$4.19 billion, while “other operations” climbed 7.6% to HK$585.09 million.

ETHOZ Group, the vehicle-leasing and financing arm, posted 9% revenue growth and a 91% jump in after-tax profit, buoyed by higher rental and interest income and lower funding costs. ZERO Group delivered mid-single-digit top-line growth and lifted net profit 6% as route optimisation and higher maintenance revenue offset inflationary pressures.

Management said the automotive downturn reflected regulatory changes—such as tighter emissions incentives in Singapore and the expiry of electric-vehicle tax concessions in Hong Kong—alongside supply constraints for key Subaru hybrid and battery-electric models. Cost controls helped cushion the impact: excluding ETHOZ and ZERO, distribution costs fell 22% YoY and administrative expenses dropped 8%.

Looking to the second half, the board signalled cautious optimism. New model launches—including Subaru’s Solterra XT and E-Outback BEVs and refreshed Nissan Serena e-POWER and X-Trail e-POWER models—are expected to underpin sales as vehicle supply normalises. The group aims to preserve margins through continued cost discipline while leveraging ETHOZ’s regional expansion and ZERO’s contracted transport services to sustain profit growth.

Management acknowledged lingering headwinds from volatile energy prices, uncertain interest-rate trajectories and intensifying competition—particularly in China and selected ASEAN markets—but believes its diversified portfolio and leaner cost base position the company to navigate the remainder of 2026.