Zhitong Finance App News, Automated Systems (00771) announced that the group expects to obtain losses attributable to company owners of about HK$290 million to HK$310 million in the first half of 2026, while profit attributable to company owners is HK$41.5 million in the same period in 2025. The Board believes that the anticipated loss for the period is mainly due to net non-cash expenses that the Group is expected to confirm with respect to its equity in the associated company Grid Dynamics Holdings, Inc. (GDH).
According to the preliminary impairment assessment carried out by the company, the market price of GDH's shares fell sharply during this period, resulting in the reported market value of the Group's equity in GDH (determined by reference to the closing price of GDH's shares on June 30, 2026) far lower than the book value of the investment recorded in the Group's consolidated financial statements. As a result, the Group expects to recognize an impairment loss in respect of its equity in the associated company. This impairment loss is expected to be partially offset by the return of previously recognized deferred tax liabilities relating to the investment. After considering the anticipated tax impact, the net negative impact on the Group's profit and loss for the period is currently expected to be approximately HK$485 million to HK$505 million.
The Board wishes to emphasize that the above anticipated impairment losses are non-cash accounting items and will not affect the Group's steady cash position or the stability of its daily operations.