Interim report
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Management Discussion and Analysis 1H2026 1 MEGA Lifesciences Public Company Limited 1H 20 2 6 MANAGEMENT DISCUSSION AND ANALYSIS
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Management Discussion and Analysis 1H2026 2 BUSINESS OVERVIEW Mega Lifesciences PCL (MEGA) is a leading participant in the health and wellness industry in developing countries. Our core business may be categorized into below segments : 1. MEGA WE CARE TM BRANDED PRODUCTS BUSINESS: We develop, manufacture, market and sell our own brand of market leading nutraceutical products, prescription pharmaceutical products and OTC products which are mostly sold in developing countries with market leading presence in Southeast Asia and growing reach in Sub - Saharan Africa. Our branded products include products where we own perpetual lic ense to third party trademarks. 2. MAXXCARE TM DISTRIBUTION BUSINESS: We market, sell and distribute various branded prescription pharmaceutical products, OTC and consumer products . We operate our Maxxcare TM distribution business in three countries, namely, Myanmar, Vietnam and Cambodia. Our clients for this business segment include leading domestic and international pharmaceutical and consumer goods companies. This segment also includes business arising from markets other than aforementioned countries where MEGA has distribution rights for third party products. Mega Lifesciences PCL
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Management Discussion and Analysis 1H2026 3 ANALYSIS OF FINANCIAL STATUS AND PERFORMANCE 1H 2 6 1 CONSOLIDATED INCOME STATEMENT SUMMARY Overall operating revenue for 1 H 26 grew by 12.5 % year - on - year, driven by strong double - digit growth in the Mega We Care ™ business. The Maxxcare ™ business also delivered strong growth, supported by the continued improvement in operating conditions in Myanmar. - Mega We Care ™ business revenue grew by 11.9 % year - on - year, underpinned by continued strength in the portfolio and sustained demand across key markets - Maxxcare ™ business revenue grew by 11.3 % year - on - year, reflecting improving operating conditions in Myanmar 1H26 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1 H 25 and 2Q25 , balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - stated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026 . Operating Cash F low THB 848 mn Operating cash flow for 1H26 represented 76% of reported net profit, with the lower cash conversion compared to earlier periods primarily reflecting a planned increase in inventory levels to support anticipated demand in the upcoming quarters. EBI TD A Overall operating revenue for 2Q 26 grew by 10.7 % year - on - year, supported by continued growth in the Mega We Care ™ business and strong double - digit growth in the Maxxcare ™ business, driven by the ongoing improvement in operating conditions in Myanmar. . - Mega We Care ™ business revenue grew by 7.7 % year - on - year, underpinned by continued strength in the portfolio and sustained demand across key markets - Maxxcare ™ business revenue grew by 14.8 % year - on - year, reflecting improving operating conditions in Myanmar 2 Q2 6 SG&A Expenses Overall Operating Revenue THB 6,942 mn THB 3, 534 mn With gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses, EBITDA increased by 33.8% year - on - year in 1H26. With gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses, EBITDA increased by 25 . 5 % year - on - year in 2Q 26. With gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses, Reported net profits increased by 33. 1 % year - on - year in 1H26. With gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses, Reported net profits increased by 3 1 . 6 % year - on - year in 2Q 26. THB 2,288 mn SG&A expenses increased by 11.1%, in line with planned spending and overall business growth. As a percentage of operating revenue, SG&A expenses remained broadly stable at 33.0% in 1H26, compared to 33.4% in 1H25. 1H 2 6 THB 1,238 mn SG&A expenses for 2Q26 increased by 15.6% year - on - year, reflecting planned higher spending to support the continued growth of the business. As a percentage of operating revenue, SG&A expenses increased to 35.0% in 2Q26 from 33.5% in 2Q25, reflecting the ti ming of SG&A spending, which is not incurred evenly across quarters. SG&A expenses are expected to remain at normal levels on a full - year basis 2 Q2 6 THB 1,613 mn 1H 2 6 THB 745 mn 2 Q2 6 5 THB 1, 119 mn 1H 2 6 THB 5 15 mn 2 Q2 6 1H 2 6 Reported Net Profit Gross Profit THB 3,613 mn Gross profit for 1H26 came in at 52.0% of operating revenue, improved compared to 50.5% in 1H25, primarily driven by improved segmental margins in both the Mega We Care ™ and Maxxcare ™ businesses. THB 1,829 mn 1H2 6 6 Gross profit for 2Q 26 came in at 5 1 . 7 % of operating revenue, improved compared to 49 . 7 % in 2Q 25, primarily driven by improved segmental margins in both the Mega We Care ™ and Maxxcare ™ businesses. 2Q26 Overall operating revenue for 1H26 grew by 12.5% year - on - year, driven by strong double - digit growth in both the Mega We Care ™ and Maxxcare ™ businesses. The Mega We Care ™ business continued to grow from the strength of its product portfolio and sustained demand across markets, while the Maxxcare ™ business delivered continued growth, supported by improving operating conditions in Myanmar. - Mega We Care ™ business revenue grew by 11.9% year - on - year, underpinned by the continued strength of its product portfolio and sustained demand across markets. - Maxxcare ™ business revenue grew by 11.3% year - on - year, reflecting the continued improvement in operating conditions in Myanmar. Overall operating revenue for 2Q26 grew by 10.7% year - on - year, driven by high single - digit growth in the Mega We Care ™ business and continued improvement in the Maxxcare ™ business, which delivered double - digit growth supported by improving operating conditions in Myanmar. - Mega We Care ™ business revenue grew by 7.7% year - on - year, underpinned by the continued strength of its product portfolio and sustained demand across markets. - Maxxcare ™ business revenue grew by 14.8% year - on - year, reflecting the continued improvement in operating conditions in Myanmar. 1H26 6 2Q26
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Management Discussion and Analysis 1H2026 4 HIGHLIGHT S Gross profit for 1H26 came in at 52.0% of operating revenue, improved compared to 50.5% in 1H25 and for 2Q26 came in at 51.7% of operating revenue, also improved compared to 49.7% in 2Q25 , primarily driven by improved segmental margins in both the Mega We Care ™ and Maxxcare ™ businesses. Mega We Care ™ business Gross margin for the Mega We Care ™ business improved to 65.3% of operating revenue in 1H26, compared to 63.7% in 1H25. In 2Q26, gross margin improved to 64.4%, compared to 62.5% in 2Q25. Gross margins are influenced by revenue growth, product mix, country mix, currency mix and level of out put, among others. Maxxcare ™ business Gross margin for the Maxxcare ™ business improved to 23.9% of operating revenue in 1H26, compared to 22.4% in 1H25. In 2Q26, gross margin improved to 25.8%, compared to 21.4% in 2Q25. Gross margins are influenced by principal mix, among others. Overall operating revenue for 1H26 grew by 12.5% year - on - year, driven by strong double - digit growth in both the Mega We Care ™ and Maxxcare ™ businesses. The Mega We Care ™ business continued to grow from the strength of its product portfolio and sustained demand across markets, while the Maxxcare ™ business delivered continued growth, supported by improving operating conditions in Myanmar. - Mega We Care ™ business revenue grew by 11.9% year - on - year, underpinned by the continued strength of its product portfolio and sustained demand across markets. - Maxxcare ™ business revenue grew by 11.3% year - on - year, reflecting the continued improvement in operating conditions in Myanmar. Overall operating revenue for 2Q26 grew by 10.7% year - on - year, driven by high single - digit growth in the Mega We Care ™ business and continued improvement in the Maxxcare ™ business, which delivered double - digit growth supported by improving operating conditions in Myanmar. - Mega We Care ™ business revenue grew by 7.7% year - on - year, underpinned by the continued strength of its product portfolio and sustained demand across markets. - Maxxcare ™ business revenue grew by 14.8% year - on - year, reflecting the continued improvement in operating conditions in Myanmar. Overall operating revenue for 1H26 was TH B 6,942 Growth of 12.5 % YoY and THB 3, 534 mn for 2 Q2 6 , a growth of 10.7 % YoY Overall gross margin for 1H26 was 5 2 . 0 % compared to 50 . 5 % for 1H25 and 51.7 % for 2 Q2 6 compared to 49.7 % for 2 Q2 5 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1 H 25 and 2Q25 , balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - stated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026 .
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Management Discussion and Analysis 1H2026 5 `` Selling and ad ministrative expenses (SG&A) was THB 2,288 mn SG&A expenses increased by 11.1%, in line with planned spending and overall business growth. As a percentage of operating revenue, SG&A expenses remained broadly stable at 33.0% in 1H26, compared to 33.4% in 1H25. SG&A expenses for 2Q26 was THB 1,238 mn , increased by 15.6% year - on - year, reflecting planned higher spending to support the continued growth of the business. As a percentage of operating revenue, SG&A expenses increased to 35.0% in 2Q26 from 33.5% in 2Q25, reflecting the timing of SG&A spending, which is not incurred evenly across quarters. SG&A expenses are expected to remain at normal levels on a full - year basis Future Outlook MEGA remains focused on further cementing its leadership position in Southeast Asia and deepening presence in the Sub - Saharan African countries, driven by market leading brands, healthy pipeline of new products, underlying potential in these regions, strat egic tie - ups, partnerships, joint ventures and acquisitions. EBI TD A for 1H26 came in at THB 1,613 mn With gross margin expansion due to strong revenue growth in both the Mega We Care and Maxxcare businesses, EBITDA increased by 33.8% year - on - year in 1H26. EBITDA for 2Q26 came in at THB 745 mn, and similarly w ith gross margin expansion due to strong revenue growth in both the Mega We Care and Maxxcare businesses, EBITDA increased by 25.5% year - on - year in 2Q26. Reported net profit for 1H26 came in at THB 1, 119 mn With gross margin expansion due to strong revenue growth in both the Mega We Care and Maxxcare businesses, Reported net profits increased by 33. 1 % year - on - year in 1H26. Reported net profits for 2Q26 came in at THB 515 mn, and similarly w ith gross margin expansion due to strong revenue growth in both the Mega We Care and Maxxcare businesses, reported net profits increased by 31 . 6 % year - on - year in 2Q26. 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1 H 25 and 2Q25 , balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - stated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026 . 2 Adjusted net profits are net profit adjusted for losses from newly started businesses including startups, net foreign exchang e gains or losses and non - recurring material income or expenses or taxes, based on best estimates, to reflect normal business perfo rmance. Interim Dividend s – THB 0.8 5 per share for 1H 202 6 Interim dividends of 8 5 satang per share , reflecting a growth of 6.2% year - on - year and representing 66 . 2 % of 1H2 6 net profits has been approved by Board of Directors. Adjusted net profit 2 for 1H26 came in at THB 1,028 mn Adjusted net profit for 1H26 was THB 1,028 million, compared to THB 921 million in 1H25, representing growth of 11.7%. For 2Q26, A djusted net profit was THB 463 million, compared to THB 435 million in 2Q25, representing growth of 6.6%. The increase in adjusted net profit was supported by gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses. The growth in A djusted net profit was lower than the growth in reported net profit in both 1H26 and 2Q26, primarily due to the foreign exchange gains and losses in respective periods.
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Management Discussion and Analysis 1H2026 6 INCOME STATEMENT Figures in THBmn 1 Q2 6 2 Q2 5 Reported 2Q25 Restated 2 Q2 6 YoY Gr. 1H25 Reported 1H25 Restated 1H26 YoY Gr. Operating revenue 3,408.1 3,399.3 3, 193 .7 3,5 34 . 3 10.7% 6,607.0 6,172.8 6,942.4 12.5% Gross profits 1,784.0 1,729.4 1,587.3 1,828.8 15.2% 3,402.7 3,119.5 3,612.7 15.8% Gross margin (% ) 52.3% 50.9% 49.7% 51.7% 51.5% 50.5% 52.0% Selling and Admin. exp (SGA) 1,049.8 1,140.7 1,070.9 1,238.0 15.6% 2,204.2 2,059.4 2,287.8 11.1% SGA (% to operating revenue) 30.8% 33.6% 33.5% 35.0% 33.4% 33.4% 33.0% EBI TDA 868.7 593.4 593.4 744.6 25.5% 1,206.1 1,206.1 1,613.2 33.8% Reported net profit 604.6 390.9 390.9 514.5 31.6% 840.8 840.8 1,119.1 33.1% Net losses from new businesses - 9.6 9.6 - ( 100.0% ) 20.8 20.8 - ( 100.0% ) Net foreign exchange loss/(gain) (40.1) 34.1 34.1 (51.2) (2 50 . 0 %) 58.9 58.9 (91.3) ( 254.9% ) Net profit (Adjusted) 564.5 434.6 434.6 463.3 6.6% 920.5 920.5 1,027.8 11.7% SUMMARIZED INCOME STATEMENT With gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses, Reported net profits increased by 33.1% year - on - year in 1H26. Overall operating revenue for 1H26 was Growth of 12.5% YoY and THB 3,534mn for 2Q26, a growth of 10.7% YoY THB 6,942 mn Overall operating revenue for 1H26 grew by 12.5% year - on - year, driven by strong double - digit growth in both the Mega We Care ™ and Maxxcare ™ businesses. The Mega We Care ™ business continued to grow from the strength of its product portfolio and sustained demand across markets, while the Maxxcare ™ business delivered continued growth, supported by improving operating conditions in Myanmar. - Mega We Care ™ business revenue grew by 11.9% year - on - year, underpinned by the continued strength of its product portfolio and sustained demand across markets. - Maxxcare ™ business revenue grew by 11.3% year - on - year, reflecting the continued improvement in operating conditions in Myanmar. Overall operating revenue for 2Q26 grew by 10.7% year - on - year, driven by high single - digit growth in the Mega We Care ™ business and continued improvement in the Maxxcare ™ business, which delivered double - digit growth supported by improving operating conditions in Myanmar. - Mega We Care ™ business revenue grew by 7.7% year - on - year, underpinned by the continued strength of its product portfolio and sustained demand across markets. - Maxxcare ™ business revenue grew by 14.8% year - on - year, reflecting the continued improvement in operating conditions in Myanmar. 1. Overall Revenue
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Management Discussion and Analysis 1H2026 7 S outheast Asia 3 and Indochina 4 contributed 79.0 % and 66.4 % of overall operating revenue s for 1H26 . 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1 H 25 and 2Q25 , balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - stated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026 . 2 Adjusted net profits are net profit adjusted for losses from newly started businesses including startups, net foreign exchang e gains or losses and non - recurring material income or expenses or taxes, based on best estimates, to reflect normal business perfo rmance. 3 Southeast Asia comprises Thailand, Myanmar, Vietnam, Cambodia, Malaysia, Philippines, Indonesia and Singapore in this report. 4 Indochina comprises Thailand, Myanmar, Vietnam and Cambodia
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Management Discussion and Analysis 1H2026 8 The following table represents the revenue generated under each operating segments. Revenue* by Business Segment *Revenue is net of inter - segment charges & elimina tions relating to consolidation Revenue mix by segments (%) Proportion of Mega We Care TM business revenue to tot al operating revenue is stable at 67.1 % for 1H26 and 6 6 .5 % for 2 Q 2 6 compared to 67.5 % for 1H25 and 68.3 % for 2Q25 of total operating revenue. Maxxcare TM business revenue to total operating revenue was 29.8 % for 1H26 and 30.3 % of total operating revenue for 2 Q2 6 compared to 30.1 % for 1H2 5 and 29.2 % for 2 Q2 5 of total operating revenue. Mega We Care TM revenue contribution t o overall revenue with improvement over the years was stable in 1H26 . 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1H25 a nd 2Q25, balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - s tated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026. Figures in THBmn 1 Q2 6 2 Q2 5 Reported 2Q25 Restated 2 Q2 6 YoY Gr. 1H25 Reported 1H25 Restated 1H26 YoY Gr. Mega We Care TM 2,310.4 2,192.7 2,181.6 2,349.4 7.7% 4,176.5 4,165.4 4,659.9 11.9% Maxxcare TM 998.5 1,128.2 933.7 1,071.5 14.8% 2,283.3 1,860.3 2,070.0 11.3% OEM 99.2 78.4 78.4 113.4 44.5% 147.2 147.2 212.5 44.4% Total 3,408.1 3,399.3 3,193.7 3,534.3 10.7% 6,607.0 6,172.8 6,942.4 12.5% 2.5 3.2 2.4 3.1 29.2 30.3 30.1 29.8 68.3 66.5 67.5 67.1 OEM Maxxcare Mega We Care 2Q25 2Q26 1H25 1H26
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Management Discussion and Analysis 1H2026 9 Mega We Care TM Branded Products Revenue Mega We Care TM Branded Products Revenue by Geography Mega We Care TM Branded Products Revenue by Geography ( 1H26 ) Southeast Asia contributed 7 3 % while Indochina contributed 5 5 % of Mega We Care TM branded products business revenue. Africa, the second largest region, contributed 1 4 % of the Mega We Care TM branded products business revenue. 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1H25 a nd 2Q25, balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - s tated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026. Figures in THBmn 1 Q2 6 2 Q2 5 Reported 2Q25 Restated 2 Q2 6 YoY Gr. 1H25 Reported 1H25 Restated 1H26 YoY Gr. Southeast Asia 1,707.5 1,709.6 1,698.5 1,707.9 0.6% 3,253.2 3,242.1 3,415.4 5.3% Africa 302.7 267.8 267.8 333.0 24.3% 490.5 490.5 635.6 29.6% Others 300.3 215.3 215.3 308.6 43.3% 432.7 432.7 608.9 40.7% Total 2,310.4 2,192.7 2,181.6 2,349.4 7.7% 4,176.5 4,165.4 4,659.9 11.9% 73% 14% 13% SEA Africa Others Mega We Care business revenue grew in 1H26 by 11.9% year - on - year, underpinned by the continued strength of its product portfolio and sustained demand across markets. Mega We Care business revenue grew in 2Q26 by 7.7% year - on - year, underpinned by the continued strength of its product portfolio and sustained demand across markets.
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Management Discussion and Analysis 1H2026 10 Maxxcare TM Distribution Revenue Segmental gross profit (%) to segmental operating revenue Segmental gross profit (%) to segmental operating revenue Segment 1 Q 2 5 Restated 2 Q2 5 Restated 1H 2 5 Restated 1Q26 2 Q2 6 1H26 Overall 51.4% 49.7% 50.5% 52.3 % 51.7 % 52. 0 % Mega We Care TM 65.0% 62.5% 63.7% 66.1% 64.4% 65.3% Maxxcare TM Distribution 23.5% 21.4% 22.4% 21.8% 25.8% 23.9% OEM 38.1% 30.0% 33.8% 38.0% 34.5% 36.1% Maxxcare ™ business revenue grew in 1H26 by 11.3% year - on - year, reflecting the continued improvement in operating conditions in Myanmar. Maxxcare ™ business revenue grew in 2Q26 by 14.8% year - on - year, similarly reflecting the continued improvement in operating conditions in Myanmar. Maxxcare TM D istribution B usiness R evenue was THB 2,070 mn for 1H26 , grew by 11.3 % YoY and 2 Q2 6 was THB 1, 072 mn, grew by 1 4 .8 % YoY. 2 . Gross Profits Overall gross margin for 1H26 was 5 2. 0 % compared to 50.5 % for 1H25 . Gross profit for 1H26 came in at 52.0% of operating revenue, improved compared to 50.5% in 1H25 and for 2Q26 came in at 51.7% of operating revenue, also improved compared to 49.7% in 2Q25, primarily driven by improved segmental margins in both the Mega We Care ™ and Maxxcare ™ businesses. Mega We Care ™ business Gross margin for the Mega We Care ™ business improved to 65.3% of operating revenue in 1H26, compared to 63.7% in 1H25. In 2Q26, gross margin improved to 64.4%, compared to 62.5% in 2Q25. Gross margins are influenced by revenue growth, product mix, country mix, currency mix and level of out put, among others. Maxxcare ™ business Gross margin for the Maxxcare ™ business improved to 23.9% of operating revenue in 1H26, compared to 22.4% in 1H25. In 2Q26, gross margin improved to 25.8%, compared to 21.4% in 2Q25. Gross margins are influenced by principal mix, among others. 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1H25 a nd 2Q25, balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - s tated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026. .
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Management Discussion and Analysis 1H2026 11 Mega We Care TM Branded Products Business Gross Profit Maxxcare TM Distribution Business Gross Profit OEM Business OEM revenue came in at THB 213 mn for 1H26 ( up by 44.4 % YoY) and THB 113 mn for 2 Q2 6 ( up by 44.5 % YoY). Gross margins came in at 36.1 % for 1H26 compared to 33.8 % for 1H25 and 34.5 % for 2 Q2 6 compared to 30.0 % for 2 Q2 5 . Gross margins are influenced by customer mix amongst other factors. Mega We Care ™ business Gross margin for the Mega We Care ™ business improved to 65.3% of operating revenue in 1H26, compared to 63.7% in 1H25. In 2Q26, gross margin improved to 64.4%, compared to 62.5% in 2Q25. Gross margins are influenced by revenue growth, product mix, country mix, currency mix and level of out put, among others. Maxxcare TM business gross margin was 23.9 % for 1H26 compared to 22.4 % for 1H 2 5 and 25.8 % for 2 Q2 6 compared to 21.4 % for 2 Q2 5 . OEM b usiness contributed 3.1 % to overall operating revenue for 1H26 . Mega We Care TM business gross margins was 65.3 % for 1H26 and 64.4 % for 2 Q2 6 compared to 63.7 % for 1H25 and 62.5 % for 2 Q2 5 . Maxxcare ™ business Gross margin for the Maxxcare ™ business improved to 23.9% of operating revenue in 1H26, compared to 22.4% in 1H25. In 2Q26, gross margin improved to 25.8%, compared to 21.4% in 2Q25. Gross margins are influenced by principal mix, among others. 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1 H 25 and 2Q25 , balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - stated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 202 6 .
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Management Discussion and Analysis 1H2026 12 SG&A expenses increased by 11.1% in 1H26, in line with planned spending and overall business growth. As a percentage of operating revenue, SG&A expenses remained broadly stable at 33.0% in 1H26, compared to 33.4% in 1H25. SG&A expenses for 2Q26 were THB 1,238 mn , increased by 15.6% year - on - year, reflecting planned higher spending to support the continued growth of the business. As a percentage of operating revenue, SG&A expenses increased to 35.0% in 2Q26 from 33.5% in 2Q25, reflecting the timing of SG&A spending , which is not incurred evenly across quarters. SG&A expenses are expected to remain at normal levels on a full - year basis 3 . Consolidated Selling and Administration Expenses (SG&A) Selling and administrative expenses (SG&A) was THB 2,288 mn f or 1H 2 6 and THB 1,238 mn for 2Q26 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1H25 a nd 2Q25, balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - s tated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026.
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Management Discussion and Analysis 1H2026 13 With gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses, Reported net profits increased by 33. 1 % year - on - year in 1H26. Reported net profits for 2Q26 came in at THB 515 mn, and similarly w ith gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses, reported net profits increased by 31 . 6 % year - on - year in 2Q26. Reported net profit for 1H26 came in at THB 1, 119 mn and THB 5 15 mn for 2 Q2 6 Adjusted net profit for 1H26 was THB 1,028 million, compared to THB 921 million in 1H25, representing growth of 11.7%. For 2Q26, A djusted net profit was THB 463 million, compared to THB 435 million in 2Q25, representing growth of 6.6%. The increase in adjusted net profit was supported by gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses. The growth in A djusted net profit was lower than the growth in reported net profit in both 1H26 and 2Q26, primarily due to the foreign exchange gains and losses in respective periods. Adjusted net profit 2 for 1H26 came in at THB 1,028 mn and THB 46 3 mn for 2 Q2 6 With gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses, EBITDA increased by 33.8% year - on - year in 1H26. EBITDA for 2Q26 came in at THB 745 mn, and similarly w ith gross margin expansion due to strong revenue growth in both the Mega We Care ™ and Maxxcare ™ businesses, EBITDA increased by 25.5% year - on - year in 2Q26. EBI TD A for 1H26 came in at THB 1,613 mn and THB 745 mn for 2 Q2 6 4 . Consolidated Net Profit 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1 H 25 and 2Q25 , balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - stated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026 . 2 Adjusted net profits are net profit adjusted for losses from newly started businesses including startups, net foreign exchang e gains or losses and non - recurring material income or expenses or taxes, based on best estimates, to reflect normal business perfo rmance.
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Management Discussion and Analysis 1H2026 14 Operating Activities Operating cash flow for 1H26 represented 76% of reported net profit, with the lower cash conversion compared to earlier periods primarily reflecting a planned increase in inventory levels to support anticipated demand in the upcoming quarters. Core working capital Dec - 25 Jun - 26 Average receivable days 80 82 Average inventory days 1 6 2 170 Average payable days ( 91 ) (9 6 ) Cash cycle (days) 1 51 156 Investing Activities In 1H26 , net cash outflow from investing activities was THB 244mn, arising from investments in tangible assets 5 of THB 254 mn mainly driven by spending towards manufacturing plants in Indonesia, Vietnam, Thailand and Australia . Capex plan In addition to the recurring maintenance and operational improvement capex incurred annually, we plan to invest approximately THB 2 . 6 Billion over the period 2026 – 202 8 . Th ese investment s are directed toward s the new manufacturing facilities in Vietnam, Myanmar, and Indonesia, supporting Mega’s strategic expansion and long - term growth in these key markets. Financing Activities In 1H26 , net cash outflow from financing activities was THB 728 mn, mainly arising from dividend payout of THB 697 mn and inflow from increase in bank borrowings of THB 2 9 mn . 5 . Cash Flow Cash cycle days increased in June 2026 to 156 days from 151 days in Dec 202 5 mainly due to increase in inventory levels to support anticipated demand in the upcoming quarters. 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1 H 25 and 2Q25 , balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - stated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026 . 5 Capital advances are considered as cash outflow towards acquisition of tangible assets in this report .
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Management Discussion and Analysis 1H2026 15 Current Assets Cash and bank balance (including cash and cash equivalents and term deposits with bank) was THB 4, 008 mn as at 3 0 Jun 202 6 , de creased by Baht 60 million as compared to 31 December 202 5 mainly due spending towards tangible assets for manufacturing plants in Indonesia, Vietnam, Thailand and Australia . Trade receivables were THB 3, 471 mn as at 30 Jun 2026 , a n inc rease of THB 279 mn compared to THB 3,192 mn as at 31 December 202 5 increase aligned to growth in revenue . Inventories were THB 3, 606 mn as at 30 Jun 2026 compared to THB 3,008mn as at 31 December 202 5 , increase to support anticipated demand in the upcoming quarters . As at 30 Jun 2026 , Current ratio was stable at 2 . 2 times. The cash cycle days as at 30 Jun 2026 was 1 5 6 days compared to 151 days as at 31 December 202 5 , increase mainly due to increase in inventory levels to support anticipated demand in the upcoming quarters . 6 . Balance Sheet Non - current Liabilities Non - current liabilities were THB 4 3 8 mn as at 30 Jun 2026 , similar to THB 4 28 mn o n 31 December 202 5 . As at 30 Jun 2026 , net - debt to equity was (0. 34 ) times, while debt to equity was 0. 5 5 times and interest - bearing debt to equity at 0.0 5 times. Non - current Assets Non - current assets were THB 4, 4 94 mn as at 3 0 Jun 202 6 , an increase of THB 256 mn or 6.0 % from 31 December 202 5 , increase mainly attributable to spending towards tangible assets for manufacturing plants in Indonesia, Vietnam, Thailand and Australia . Current Liabilities Current liabilities were THB 5, 245 mn as at 30 Jun 2026 , an increase of THB 641 mn or 13.9 % compared to 31 December 202 5 . Current liabilities have increased due to increase in other payables by THB 310 mn due to payables to importers which will be settled in due course and increase in Trade payables by THB 286mn . Trade payables were THB 2,005 mn as at 30 Jun 2026 , an increase of THB 286 mn or 16.6 % from 31 December 202 5 levels increase due to increase in Inventory levels. Shareholders’ Equity Shareholders’ equity was THB 10, 344 mn as at 30 Jun 2026 , a n increase of THB 55 8 mn compared to 31 December 202 5 , primarily attributable to profits for 1H26 partly offset by payment of dividends and currency translation gains arising from foreign subsidiaries mainly due to depreciation of THB to USD . . 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1 H 25 and 2Q25 , balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - stated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026 .
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Management Discussion and Analysis 1H2026 16 CONSOLIDATED BALANCE SHEET Figures in THBmn 3 0 - Jun - 26 31 - Dec - 25 Re - stated 31 - Dec - 25 Reported Change 9 Amount % Amount % Amount % Amount % Current Assets Cash and bank balances 6 4,007.8 25.0% 4,067.7 27.5% 4,628.7 29.4% (59.9) (1.5%) Trade accounts receivable 3,470.6 21.7% 3,191.6 21.5% 3,306.4 21.0% 279.0 8.7% Inventories 3,606.4 22.5% 3,008.4 20.3% 3,038.0 19.3% 598.1 19.9% Other current assets 447.3 2.8% 311.3 2.1% 379.6 2.4% 136.0 43. 7 % Total Current Assets 11,532.1 72.0% 10,578.9 71.4% 11,352.7 72.0% 953.2 9.0% Non - Current Assets P roperty, plant and equipments 7 1,983.9 12.4% 1,838.0 12.4% 1,947.6 12.4% 145.9 7.9% Intangible assets 8 1,316.7 8.2% 1,295.6 8.7% 1,295.7 8.2% 21.1 1.6% Deferred tax asset 390.5 2.4% 360.6 2.4% 375.3 2.4% 29.9 8.3% Right - of - use assets 429.1 2.7% 440.0 3.0% 483.8 3.1% (10.9) (2.5%) Other non - current assets 374.1 2.3% 304.1 2.1% 304.1 1.9% 70.0 23.0% Total Non - Current Assets 4,494.3 28.0% 4,238.3 28.6% 4,406.5 28.0% 256.0 6.0% Total Assets 16,026.4 100.0% 14,817.2 100.0% 15,759.2 100.0% 1,209.2 8.2% Current Liabilities Bank overdrafts & short - term Loans 520.3 3.2% 472.2 3.2% 472.2 3.0% 48.1 10.2% Trade accounts payable 2,005.0 12.5% 1,719.4 11.6% 1,720.2 10.9% 285.6 16.6% Other payables 1,441.7 9.0% 1,131.3 7.6% 1,586.3 10.1% 310.5 27.4% Current portion of lease liabilities 59.3 0.4% 65.1 0.4% 65.1 0.4% (5.8) (8.9%) Income tax payable 340.2 2.1% 318.7 2.2% 323.3 2.1% 21.5 6.7% Accrued expenses 878.1 5.5% 896.7 6.1% 929.1 5.9% (18.6) (2.1%) Total Current Liabilities 5,244.6 3 2 .7% 4,603.4 31.1% 5,096.3 32.3% 641.2 13.9% Non - Current Liabilities Lease liabilities 115.2 0.7% 126.7 0.9% 146.2 0.9% (11.5) (9.1%) Deferred tax liability - 0.0% 0.6 0.0% 0.6 0.0% (0. 5 ) (92.3%) Employees benefits obligation 322.6 2.0% 301.0 2.0% 301.0 1.9% 21.7 7.2% Other non - current liabilities - 0.0% - 0.0% - 0.0% - Total Non - Current Liabilities 437.8 2.7% 428.2 2.9% 447.8 2.8% 9.6 2.2% Total Liabilities 5,682.5 3 5 .5% 5,031.6 34.0% 5,544.0 35.2% 650.8 12.9% Equity Issued and paid - up share capital 435.9 2.7% 435.9 2.9% 435.9 2.8% - 0.0% Premium on ordinary shares 2,304.5 14.4% 2,304.5 15.6% 2,304.5 14.6% - 0.0% Retained earnings: Appropriated 76.1 0.5% 76.1 0.5% 76.1 0.5% - 0.0% Unappropriated 8,675.8 54.1% 8,254.2 55.7% 8,292.9 52.6% 421.6 5.1% Other components of equity (1,148.4) (7. 2 %) (1,285.2) (8.7%) (894.2) (5.7%) 136.7 (10.6%) Owner’s Equity 10,343.9 6 4 .5% 9,785.6 66.0% 10,215.2 64.8% 558.3 5.7% Non - controlling interests 0.1 0.0% 0.0 0.0% 0.0 0.0% 0.0 41.8% Total Equity 10,343.9 6 4 .5% 9,785.6 66.0% 10,215.2 64.8% 558.4 5.7% Total Liabilities and Equity 16,026.4 100.0% 14,817.2 100.0% 15,759.2 100.0% 1,209.2 8.2%
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Management Discussion and Analysis 1H2026 17 CONSOLIDATED BALANCE SHEET 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1H25 a nd 2Q25, balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - s tated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026. 6 Cash and bank balances as at balance sheet dates include non - restricted term deposits with banks 7 Includes asset classified as investment property 8 Includes goodwill 9 Change represents the movement between the balances as at 3 0 Jun 2026 and the re - stated comparative balances as at 31 December 2025
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Management Discussion and Analysis 1H2026 18 CONSOLIDATED INCOME STATEMENT Figures in THBmn 1 Q2 6 2 Q2 5 Reported 2Q25 Restated 2 Q2 6 YoY Gr. 1H25 Reported 1H25 Restated 1H26 YoY Gr. Operating Revenue 3,408.1 3,399.3 3,193.7 3,534.3 10.7% 6,607.0 6,172.8 6,942.4 12.5% Other income 27.8 40.0 40.0 34.1 (14.9%) 63.2 63.2 61.9 (2.0%) Total Income 3,435.9 3,439.4 3,233.7 3,568.4 10.3% 6,670.2 6,236.0 7,004.3 12.3% Cost of goods sold 1,624.1 1,670.0 1,606.4 1,705.5 6.2% 3,204.3 3,053.3 3,329.7 9.1% Gross profits 1,784.0 1,729.4 1,587.3 1, 828.8 15.2% 3,402.7 3,119.5 3,612.7 15.8% Gross margin (%) 52.3% 50.9% 49.7% 51.7% 51.5% 50.5% 52.0% Selling expense 611.8 661.3 625.7 753.0 20.4% 1,259.8 1,185.1 1,364.8 15.2% Administrative expense 438.0 479.4 445.2 484.9 8.9% 944.4 874.3 923.0 5.6% Selling & Administrative exp (SGA) 1,049.8 1,140.7 1,070.9 1,238.0 15.6% 2,204.2 2,059.4 2,287.8 11.1% SGA (% to operating revenue) 30.8% 33.6% 33.5% 3 5 .0% 33.4% 33.4% 33.0% Net foreign exchange loss/(gain) (40.1) 106.4 34.1 (51.2) ( 250.0%) 197.3 58.9 (91.3) (254.9%) EBITDA 868.7 593.4 593.4 744.6 25.5% 1,206.1 1,206.1 1,613.2 33.8% Depreciation & Amortization 66.6 71.1 71.1 68.5 (3.7%) 141.8 141.8 135.1 (4.7%) Finance cost 14.8 13. 5 13.5 11.9 (11.2%) 22.5 22.5 26.8 19.3% Share of profit/(loss) from JV (7.4) (0.1) (0.1) - (100.0%) (0.1) (0.1) (7.4) Profit before tax 779.9 508.8 508.8 664.1 30.5% 1,041.7 1,041.7 1,444.0 38.6% Tax expense 175.3 117.9 117.9 149.6 26.9% 201.0 201.0 324.9 61.7% Reported net profit 604.6 390.9 390.9 514.5 31.6% 840.8 840.8 1,119.1 33.1% Basic earning s per share 0.69 0.45 0.45 0.59 31.6% 0.96 0.96 1.28 33.1% Net losses from new businesses - 9.6 9.6 - (100.0%) 20.8 20.8 - (100.0%) Net foreign exchange loss/(gain) (40.1) 34.1 34.1 (51.2) ( 250.0% ) 58.9 58.9 (91.3) (254.9%) Net profit (Adjusted) 564.5 434.6 434.6 463.3 6.6% 920.5 920.5 1,027.8 11.7% Net profit margin to operating revenue 17.7% 11.5% 12.2% 14.6% 12.7% 13.6% 16.1% Basic earning s per share 0.69 0.45 0.45 0.59 31.6% 0.96 0.96 1.28 33.1% 1 With the implementation of amendments to Thai Accounting Standard 21 – The Effects of Changes in Foreign Exchange Rates in 20 26, the Group adopted a market - based exchange rate for the Myanmar Kyat against foreign currencies. Accordingly, the statement of profit and loss for 1H25 a nd 2Q25, balance sheet as at 31 - Dec - 2025 and other comparative financial information, have been re - s tated in the MD&A across relevant line items based on best estimates. This re - statement has no impact on overall profitability and is intended to enable meaningful comparison with 2026.
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Management Discussion and Analysis 1H2026 19 Disclaimer The information contained in our analysis is intended solely for your personal reference only. In addition, any forward - looking statements reflect our current views with respect to future events and financial performance. These views are based on assumptions subject to various risks and uncertainties. No assurance is given that future events will occur or that our assumptions are correct. Actual results may differ materially from those projected.