Engvik: The decrease in net profit attributable to shareholders in the first quarter of 2026 was mainly due to increased financial expenses and rising credit impairment losses. The first quarter had ample orders but did not achieve higher shipment and revenue recognition.

According to the Evic investor relations activity record, an investor asked, what is the main reason for the lower return on net profit in the first quarter of 2026 as disclosed in the "2026 Q1 Quarterly Report"? The company responded that the main reason is the increase in financial expenses: some of the company's overseas business projects are settled in local currency, resulting in exchange losses due to the appreciation of the renminbi; in addition, the financing scale has increased, leading to higher interest expenses. The increase in credit impairment loss compared to the previous year is mainly due to the slower pace of domestic IDC construction, longer project implementation cycles, resulting in slower settlement and receivables cycles, leading to an increase in bad debt provisions. Due to changes in the revenue mix in the first quarter, the gross profit margin decreased by 2.16% year-on-year. The first quarter had ample orders, but higher shipments and revenue recognition were not achieved.