CHINA PENGFEI Group reported mixed interim results for the six months ended 30 June 2026. Revenue fell 7.75% year-on-year to RMB527.56 million, but net profit attributable to shareholders improved 6.0% to RMB44.50 million, lifting basic EPS to RMB0.089.

Segment mix shifted markedly. • Equipment manufacturing revenue increased 9.41% to RMB469.13 million, accounting for 88.93% of the top line (H1-2025: 75.02%). • Construction of production lines dropped 64.5% to RMB46.07 million after several projects reached completion in prior periods. • Installation services slipped 5.6% to RMB12.35 million.

Cost of sales decreased 9.22% to RMB403.87 million, allowing gross profit to contract only 2.28% to RMB123.69 million. The gross margin widened 1.3 ppt to 23.4%, aided by lower raw-material costs and a richer mix of higher-margin equipment sales.

Operating metrics were mixed: • Other income climbed 52.7% to RMB18.09 million, driven by higher interest income and government grants. • Selling and distribution expenses fell 27.5% to RMB33.24 million as commissions and logistics costs eased. • Administrative costs rose 5.4% to RMB28.86 million on higher technical-service and employee-benefit expenses. • R&D spending remained steady at RMB18.89 million, underpinning 62 pending invention patents and continued product diversification into metallurgy, chemicals and environmental-protection equipment.

Profit before tax rose 8.80% to RMB52.69 million. The effective tax rate increased to 17.4% (H1-2025: 13.2%), leaving net profit at RMB43.53 million, of which RMB44.50 million was attributable to equity holders.

Balance-sheet highlights show expansion in working capital: • Inventories surged 35.3% since December to RMB722.98 million amid higher domestic orders, extending inventory days to 280 from 201. • Contract liabilities advanced 28.2% to RMB1.03 billion on customer prepayments. • Cash, term and restricted deposits totalled RMB980.14 million, supporting a current ratio of 129.5%. • Net current assets stood at RMB520.33 million, while the gearing ratio rose to 176.1% on larger payables and contract liabilities. Bank borrowings remained modest at RMB0.60 million.

The Board paid a 2025 final dividend of RMB0.06056 per share (RMB30.28 million) in the period and declared no interim dividend for 2026.

Management signalled a strategic focus on four pillars—technology, internationalisation, green development and digitalisation—to deepen penetration in building-materials, metallurgical and new-energy markets and to pursue global EPC opportunities, particularly in Belt-and-Road countries.