Valuetronics shares drop 18.2% after warning of ‘significant’ earnings slide

[SINGAPORE] Mainboard-listed electronics manufacturer Valuetronics Holdings on Tuesday (May 12) said it expects to report a “significant” drop in net profit for its 2026 financial year.

It cited non-cash impairments linked to Trio AI, a Hong Kong-based joint venture in which Valuetronics holds a 26.6 per cent equity stake. Though listed in Singapore, Valuetronics is headquartered in Hong Kong with manufacturing operations in China.

Shares of Valuetronics fell as much as 18.2 per cent to S$0.965 as at 9.22 am on Wednesday.

The company expects to recognise provisions against the carrying amount of its investment cost, advances made to the venture and outstanding receivables.

Additionally, Valuetronics will take a hit on graphics processing units (GPUs) and ancillary hardware deployed to Trio AI under an equipment leasing arrangement, as well as undeployed assets held by the broader group.

The impairments follow Trio AI’s failure to achieve sufficient commercial traction, despite the admission of a new joint venture partner in September 2025 that was intended to bolster its capital base and commercialisation efforts. The injection of additional working capital did not yield an improvement in business performance.

Compounding the financial drag, Trio AI has missed contractual due dates for certain rental payments owed to Valuetronics for the leased equipment.

Valuetronics established Trio AI to provide GPU and artificial intelligence-related cloud services in Hong Kong, acquiring the necessary hardware through its wholly owned subsidiary, Computing Assets.

The company cited “uncertainties relating to Trio AI’s business outlook, funding requirements and commercialisation progress” as the basis for the expected provisions.

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Valuetronics is currently finalising its unaudited financial statements for FY2026 and is expected to release its full results before market open on May 28.