Avi-Tech Holdings Limited 1H2026 Financial Results Analysis

Avi-Tech Holdings Limited announced its financial results for the first half ended 31 December 2025 (1H2026). The company operates core businesses in burn-in services, manufacturing, printed circuit board assembly (PCBA), and engineering services for the semiconductor, electronics, and other industrial sectors. The results reflect challenging industry conditions, particularly in non-AI semiconductor segments, with continued pressures from inventory gluts and reduced demand in the automotive and industrial sectors.

Key Financial Metrics and Comparative Table

Historical Performance and Trends

The company’s performance has weakened compared to the prior periods, with revenue declining by 3% year-over-year and quarter-over-quarter. Gross profit and margin have fallen sharply and the net loss has widened significantly. The main contributor to revenue, Manufacturing and PCBA Services, saw slight growth, but this was offset by a downturn in Engineering Services due to softer demand and project deferments.

Liquidity and Financial Position

Avi-Tech maintains a strong liquidity position, reporting a positive working capital of \$40.7 million and a cash balance of \$37.5 million as at 31 December 2025. The company’s total assets are \$55.1 million against total liabilities of \$5.6 million, which provides flexibility for strategic investments and potential diversification.

Dividend Policy

No interim dividend was declared for 1H2026. The Board cited the need to preserve financial strength, prioritize capital allocation for strategic initiatives, and maintain adequate cash flow as reasons for withholding dividends this period.

Exceptional Items and Corporate Actions

No exceptional earnings or expenses were reported. The company is pursuing diversification through expansion into Automated Test Equipment Load Boards and IoT solutions, including a proposed M&A with Create Technologies. No asset revaluation, share buybacks, dilutions, or unusual fund flows were disclosed.

Chairman’s Statement

The Chairman’s statement conveys a cautious and pragmatic tone, reflecting current industry challenges and the company’s strategic response:

“The Group’s performance for the first half remained very challenging, extending the difficult conditions experienced in the second half of 2025. The Group’s business segments were impacted primarily by weaker performance in the Engineering segment, arising from softer demand and project deferments by customers amid a challenging operating environment. This reflects broader industry conditions, with major semiconductor manufacturers facing heightened risks in 2026, particularly in non-AI segments… Although the environment remains challenging, we are agile and well-positioned to seize opportunities as market conditions stabilise. We are strengthening our market position by expanding our board business and diversifying into new areas. As part of this strategy, the Group is venturing into Automated Test Equipment Load Boards, a high-growth segment driven by rising semiconductor complexity… At the same time, we are advancing our IoT capabilities through the previously announced proposed M&A with Create Technologies, which, if completed, is expected to contribute to diversification and growth of earnings and provide strategic entry into a new business segment, tapping into rising demand for high-precision tracking, positioning, and monitoring solutions across industries, while strengthening the Group’s long-term resilience and growth.”

Outlook and Forecasted Events

The outlook remains cautious. Avi-Tech faces an increasingly complex global operating environment with ongoing geopolitical tensions, escalating trade restrictions, and volatility in semiconductor supply chains. Despite subdued near-term revenue expectations, management views these pressures as cyclical and expects normalization of inventory levels. Strategic diversification into new business segments is underway to enhance resilience and support long-term growth.

Conclusion & Investment Recommendations

Overall, Avi-Tech’s financial performance appears weak for 1H2026, with declining revenue, margins, and expanding losses. However, the Group’s strong liquidity, prudent capital management, and ongoing diversification strategies provide some grounds for cautious optimism about long-term resilience and recovery.

• If you currently hold Avi-Tech shares: Consider maintaining your position if you have a long-term investment horizon and are comfortable with near-term volatility. The company’s strong liquidity and strategic initiatives may support eventual recovery, but continued monitoring of financial performance and completion of diversification efforts is advised.
• If you do not currently hold Avi-Tech shares: Exercise caution before initiating a position. Weak earnings and no dividend, coupled with challenging industry conditions, suggest waiting for clearer signs of operational turnaround or successful execution of diversification strategies.

Disclaimer: This analysis is strictly based on information disclosed in Avi-Tech’s official financial report for 1H2026. It does not constitute personalized investment advice. Investors should consider their own risk tolerance, investment horizon, and seek professional advice before making investment decisions.

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