CCSC Technology International Holdings Limited (Nasdaq: CCTG) announced a 1‑for‑10 reverse stock split of its ordinary shares, effective January 23, 2026. The split will reduce the number of Class A ordinary shares from 34,134,950 to 3,413,495 and Class B shares from 5,000,000 to 500,000, while preserving each shareholder’s proportional ownership. Fractional shares will be rounded up to the next whole share.
The reverse split is a direct response to a Nasdaq deficiency notice received in December 2025. Under Nasdaq Marketplace Rule 5550(a)(2), a listed company must maintain a minimum bid price of $1.00 per share. Failure to do so can result in delisting, so the company’s board and shareholders approved the split to regain compliance and avoid a potential removal from the Nasdaq Capital Market.
Financially, the company reported a decline in revenue and widening losses for the first half of fiscal 2026. Revenue fell 8.2% year‑over‑year to $8.47 million, down from $9.22 million in the same period last year, while the net loss widened to $0.97 million from $0.74 million. Gross profit margin contracted to 29.2% from 29.8% in the prior year, reflecting higher fixed costs per unit amid lower sales volume.
Segment analysis shows that cables and wire harnesses account for 92.5% of total revenue, with Europe contributing 58.8% of sales. Headwinds include reduced orders from a major customer undergoing a product transition, higher U.S. tariffs affecting sales in the Americas, and increased fixed costs per unit due to lower sales volume. A potential tailwind is the planned construction of a new supply‑chain management center in Serbia, expected to improve efficiency and responsiveness in the European market.
Management emphasized a continued focus on product innovation, operational execution, and disciplined investment. In a statement, the company said it remains committed to delivering high‑quality, customized interconnect solutions to its customers while navigating current market challenges.
The reverse split is primarily a compliance measure rather than a growth initiative. It signals that the company’s share price has fallen below Nasdaq’s minimum bid‑price threshold, underscoring underlying financial weakness. However, by restoring compliance, CCSC Technology preserves its Nasdaq listing, giving it time to address revenue decline, control costs, and execute operational plans such as the new Serbian supply‑chain center.
Investors should monitor the company’s ability to reverse its declining revenue trend, improve profitability, and maintain compliance with Nasdaq rules. The reverse split provides a short‑term safeguard, but long‑term success will depend on the company’s execution of its strategic priorities and its response to ongoing headwinds.
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