Fu Yu (6264-TW) reported equity increasing by 191 million TWD to 1.04 billion TWD over a half-year period, despite posting a loss of 84.39 million TWD during the same timeframe. The equity increase stemmed from an accounting policy announcement made on May 14, 2026, in which the company's board of directors resolved to change the subsequent measurement of investment property from the cost model to the fair value model. The policy became effective January 1, 2026, and was retroactively applied to restate the balance sheet as of December 31, 2025, resulting in a 276 million TWD increase in investment property and a corresponding increase in equity. The company disclosed that accumulated losses reached half of its paid-in capital as of the first quarter, triggering a mandatory shareholder report under Article 211 of the Company Act.
Fu Yu Adopts Fair Value Model for Investment Property
Fu Yu announced on May 14, 2026, that its board of directors resolved to switch the subsequent measurement of investment property from the cost model to the fair value model. The new policy took effect on January 1, 2026, and the company retroactively restated its balance sheet as of December 31, 2025. The restatement increased investment property by 276 million TWD and equity by the same amount, while recording 73,000 TWD in deferred income tax liabilities.
The company's financial presentation retained the old policy figures in the December 31, 2025 column. After incorporating the revaluation, the restated equity as of year-end 2025 stood at 1.125 billion TWD (849 million TWD plus 276 million TWD revaluation, minus 73,000 TWD deferred tax). Subtracting the first-half net loss of 84.39 million TWD yielded the June 30, 2026 equity of 1.04 billion TWD. The two columns in the presentation used different accounting bases.
Earnings per share after tax remained negative for two consecutive quarters in 2026, and earnings per share from core operations also posted negative values. Core operations failed to offset the equity decline. The debt ratio comparison was similarly affected by the accounting basis difference. The 81.11% figure represented year-end 2025 under the old policy, while 79.30% represented June 30, 2026 under the new policy. Adding the 276 million TWD revaluation to the December 31, 2025 assets of 44.91 billion TWD produced restated assets of 47.67 billion TWD and equity of 1.125 billion TWD, yielding a debt ratio of 76.4%. The subsequent 79.30% figure represented an increase of 2.9 percentage points over the half-year period. The revalued investment property was listed separately from the company's 13 construction projects.
Long Hung Construction Raises Cash to Repay Bank Loans
Fu Yu issued 36 material announcements between January and August 2026, none of which involved cash capital increases, private placements, convertible bonds, or capital reductions. The most recent capital change occurred in May 2025 through a private placement cash capital increase, which added approximately 10,000 shares to the share capital. That private placement funding was already reflected in the December 31, 2025 figures.
The same May 14, 2026 announcement noted that accumulated losses as of the first quarter reached half of the paid-in capital, requiring a shareholder report under Article 211 of the Company Act. The accounting year in which equity increased on paper due to revaluation was also the year accumulated losses reached the threshold requiring shareholder notification.
Long Hung Construction simultaneously issued 1.5 billion TWD in corporate bonds and raised 1.5 billion TWD through a cash capital increase in early 2026. The company stated the purpose was to repay bank loans, after which it retained 10 billion TWD in available bank credit lines. The peer reduced liabilities through actual debt repayment, while Fu Yu increased the book value of assets.
Long Hung Construction's August investor conference addressed borrowing costs. The floor rate of 2.825% for land and construction financing represented the lowest level banks would offer, as market rates no longer quoted figures starting with 2%, with quotes beginning at 3%. Long Hung's own average interest rate remained near 2.4% due to earlier borrowing timing.
The revaluation added 276 million TWD to book equity, but the half-year increase consisted of revaluation gains rather than cash. The company continued to post losses, and share capital remained unchanged.
FAQ
What accounting policy change did Fu Yu announce on May 14, 2026?
Fu Yu's board of directors resolved to change the subsequent measurement of investment property from the cost model to the fair value model, effective January 1, 2026, with retroactive application to restate the December 31, 2025 balance sheet.
How did the accounting revaluation affect Fu Yu's debt ratio?
The revaluation increased investment property and equity by 276 million TWD. When comparing on the same accounting basis, the restated debt ratio as of December 31, 2025 was 76.4%, and the June 30, 2026 debt ratio was 79.30%, representing an increase of 2.9 percentage points over the half-year period.
What approach did Long Hung Construction take to manage its capital structure in 2026?
Long Hung Construction issued 1.5 billion TWD in corporate bonds and raised 1.5 billion TWD through a cash capital increase in early 2026, stating the purpose was to repay bank loans, with 10 billion TWD in available bank credit lines remaining afterward.
