Royale Home Holdings Limited released its 1H 2026 interim results, showing a sharp contraction in top-line performance and a wider net loss as property revaluation pressure offset modest margin gains.
Financial Performance • Revenue declined 42.9% year-on-year to RMB 99.12 million, reflecting subdued demand for new-home furniture packages and intense industry competition. • Gross profit margin improved to 6.6% from 5.3% a year earlier, but absolute gross profit fell 28.7% to RMB 6.59 million. • Loss attributable to owners expanded to RMB 333.32 million, compared with a RMB 268.59 million loss in 1H 2025, mainly due to a RMB 97.01 million negative fair-value adjustment on investment properties and continued manufacturing sector weakness. • Finance costs remained elevated at RMB 97.63 million (1H 2025: RMB 104.98 million).
Segment Results • Manufacture & Sale of Furniture: Revenue of RMB 94.89 million (-42.5% YoY); segment loss widened to RMB 179.17 million. • Development Properties & Investment: Revenue of RMB 0.21 million; segment loss deepened to RMB 188.63 million, influenced by the investment-property fair-value drop. • Hotel Operations: Revenue decreased 53.5% to RMB 4.03 million, registering a RMB 14.52 million segment loss.
Balance Sheet & Liquidity • Inventories fell 14% year-to-date to RMB 193.17 million, while prepayments, deposits and other receivables contracted 59% to RMB 306.95 million. • Cash and cash equivalents stood at RMB 33.87 million (31 Dec 2025: RMB 78.30 million). • Net current liabilities reached RMB 427.39 million versus net current assets of RMB 10.17 million at end-2025, as current borrowings remained high at RMB 636.94 million. • The gearing ratio (net debt to capital plus net debt) increased to 93% from 86% six months earlier.
Debt Management • Total interest-bearing bank and other borrowings rose to RMB 893.33 million (31 Dec 2025: RMB 858.76 million). • Loans from the ultimate and immediate holding companies, fellow subsidiaries and minority shareholders totalled RMB 2.13 billion, down from RMB 2.44 billion at year-end. • In February 2026, Royale Home redeemed three medium-term bonds for RMB 1.75 million and repurchased the remaining HK$670 million (about RMB 27.75 million) of 0.1% bonds due 2064, eliminating the entire outstanding balance. As a result, medium-term bonds fell to nil from RMB 42.39 million.
Operational Highlights • The company maintained its position among the “Top 500 Most Valuable Brands in China,” with a brand value of RMB 30.88 billion. • Overseas expansion advanced, with deeper penetration in Central and Southeast Asia’s project channels and the launch of e-commerce initiatives in Southeast Asia and the United States. • Industrial renovation business focused on high-end market segments, growing external order intake and strengthening collaborations with technology enterprises and real-estate developers.
Capital Allocation & Dividend No interim dividend was declared for the period.
Outlook Management expects policy support for home consumption, urban renewal and elder-friendly renovations to underpin demand in 2H 2026. Nonetheless, weak new-home furniture demand, industry homogenisation and external uncertainties remain key challenges. The Group aims to bolster overseas revenue, expand industrial renovation projects, enhance product R&D, and pursue cost efficiency while continuing debt optimisation and cash-flow management.