The Lotus Holdings Co., Ltd. (Lotus Holdings) announced on the evening of July 13 that the net profit attributable to the parent company for the first half of 2026 is expected to increase by 48.75% to 61.14% compared to the same period last year. However, to the surprise of many, the stock price of Lotus Holdings fell by 9.95% on the 14th.
In the “2026 Semi-Annual Performance Forecast” announcement released by Lotus Holdings on the evening of the 13th, it stated, “It is expected that the net profit attributable to the shareholders of the listed company for the first half of 2026 will be between 240 million and 260 million yuan (RMB), an increase of 78.65 million to 98.65 million yuan compared to the same period last year (as disclosed by law), representing a year-on-year growth of 48.75% to 61.14%. The net profit after deducting non-recurring gains and losses attributable to the shareholders of the listed company is estimated to be between 200 million and 220 million yuan, an increase of 38.59 million to 58.59 million yuan compared to the same period last year (as disclosed by law), representing a year-on-year growth of 23.91% to 36.31%.”
A financial data growth of 48.75% to 61.14% year-on-year is impressive for any company, but the market’s reaction to this was quite different.
On the 14th, the stock price of Lotus Holdings plunged significantly after opening, closing at 9.95 yuan per share, a decrease of 9.95%.
In response to this unusual market behavior, a Lotus Holdings staff member told “Daily Economic News” on the 14th that the company’s focus is on performing well in terms of financial performance, and currently, all operations are normal.
The performance of the stock market seems to indicate investors’ concerns about the future operation of Lotus Holdings, and the company itself admits that there are indeed many unfavorable factors affecting its operation.
According to the response announcement issued by Lotus Holdings on July 13 regarding the Shanghai Stock Exchange’s regulatory inquiry letter on the company’s 2025 annual report, in 2025, the company incurred sales expenses of 289 million yuan, a year-on-year increase of 52.75%. This included service fees, advertising expenses, and marketing expenses, which increased by 31.53%, 1180.51%, and 1143.20% respectively.
The announcement also stated that the company faces operational risks, such as “the risk of continuous impairment of fixed assets and inventory related to the company’s computing power leasing business,” “the risk of investment losses in external investments,” and “the company has a considerable amount of restricted monetary funds, with a large amount of external borrowing, leading to pressure on daily fund turnover.”
Moreover, the significant fluctuations in market prices in the memory industry have led the company to make impairment provisions of 12.2165 million yuan for its computing-related fixed assets last year. Regarding its core product, Lotus MSG, the announcement also mentioned that while the sales volume of MSG is increasing rapidly, the customer base is relatively small and diversified. Currently, the company has more than 3000 cooperative customers, with the top ten customers accounting for only 13.63% of MSG’s total revenue, indicating significant uncertainty in MSG sales.
Public records show that Lotus Holdings Co., Ltd. was formerly known as Henan Lotus MSG Co., Ltd. and Henan Lotus Healthy Industry Co., Ltd. It is a publicly traded company primarily engaged in the food manufacturing industry, established on July 2, 1998. Its flagship product, Lotus MSG, is a well-known traditional seasoning brand in China, known as the “MSG King.”