Luyuan Group Holdings (02451) fell more than 3% in Hong Kong trading, with shares last down 3.6% at HK$12.85, on turnover of HK$8.49 million.

The company recently warned that its attributable net profit for the six months ending June 30, 2026 is expected to decline by up to 35% compared to the approximately RMB 110 million recorded in the same period a year earlier.

According to the company, the expected profit drop is driven by both industry factors and the group's strategic adjustments. On the industry side, following the full transition to new national standards, consumers are taking time to adapt to new products. This has slowed replacement demand from end-users, leading to a year-on-year decline in sales volume and lower revenue.

On the strategic side, in order to seize opportunities from industry upgrades, Luyuan Group Holdings is actively expanding into new growth areas, including high-speed electric motorcycles and embodied intelligent robots. The company is also accelerating its overseas channel development and localizing product offerings. These initiatives have led to a significant year-on-year increase in research and development costs and upfront investments, resulting in a temporary decline in profit.