SCHMID (SHMD) Nearly Tripled Revenue but Cut its Adjusted EBITDA Margin Outlook. Is China Growth Too Low-Margin?

Schmidt Group (NASDAQ: SHMD) reported a significant 172% increase in revenue to €46.0 million in the first half of 2026, despite cutting its adjusted EBITDA margin outlook. Gross profit rose to €9.8 million, boosting the gross margin to 21.2%. However, the company lowered its full-year adjusted EBITDA margin expectation to 6%-9% due to weaker profitability and a product mix favoring its lower-margin Chinese business.

The company's company-defined non-IFRS adjusted EBITDA loss narrowed to €0.6 million from €11.6 million, and its IFRS operating loss remained at €8.0 million. China generated more than half of the revenue, but the higher Chinese mix resulted in a gross margin below expectations. The company maintains its revenue target of over €100 million and expects a stronger contribution from the German plant.

SCHMD has attracted 15 hedge funds holding the shares as of the end of Q2 2026, up from 9 funds three months earlier. Despite the turnaround, the margin and cash flow components remain uncertain, and the company's investment potential is questioned.