VITAL INNO (06133) has issued a profit alert, projecting no revenue for the six months ending June 30, 2026, a stark contrast to the roughly RMB 449 million recorded in the corresponding period of 2025. Despite this significant revenue shortfall, the company anticipates its net loss for the period to narrow to between approximately RMB 6.2 million and RMB 6.5 million, down from about RMB 8.41 million in the prior year's first half.
The anticipated reduction in net loss is primarily attributed to the group's effective cost-control measures, which have led to lower rental expenses and reduced human resource costs.
The company's subsidiaries are primarily engaged in the trading of mobile devices, including related components and accessories, smart devices, and LED products. Regarding the mobile and smart device trading segment, the group adopted a cautious approach during the period. Considering the low profit margins of branded phones and weak consumer demand, it refrained from purchasing any branded phone inventory to avoid stockpiling and subsequent clearance sales that could incur losses. As previously disclosed, branded phone sales were expected to gradually resume from June 2026 onward. However, the relevant suppliers were unable to offer inventory on terms that would generate sufficiently high margins for the group. Consequently, the group declined those orders to avert potential losses. In the second half of 2026, the company will focus on leveraging its existing channels to sell certain customized phones in mainland China, which is expected to generate revenue for its mobile and smart device trading business.
Additionally, the group has been collaborating with relevant business partners to introduce satellite professional terminals through central procurement and tendering arrangements. Although progress has been made in the satellite phone business, shipments of related products are now anticipated to commence in the third quarter of 2026. As a result, this segment is not expected to contribute revenue during the current period.
For the LED product trading segment, the group does not anticipate any revenue contribution in this period, as it has also been prudent in accepting LED product orders, prioritizing profit control. The appreciation of the Renminbi from late 2025 through the first half of 2026 has significantly impacted LED exports, directly compressing suppliers' profit margins. In June 2026, the company entered into a sales contract with a customer for the trading of LED products, with revenue from this agreement expected to be recognized in the second half of 2026.
Given that demand for LED products in Western markets is shifting from traditional lighting to smart, high-efficiency alternatives, and given the opportunities presented by emerging markets in Southeast Asia, the Middle East, and Latin America—which rely heavily on imports for LED products—the group has adopted an overseas expansion strategy. This strategy aims to sell LED products to these markets and secure stable long-term growth. These market trends are expected to translate into demand for the group's LED offerings, and the group anticipates a gradual improvement in LED product trading revenue during the second half of 2026.