BEFAR GROUP (06745) saw its share price climb almost 6% during the morning trading session, last up 5.9% at HK$3.23, with turnover reaching HK$31.96 million. The rally comes as the company released its interim results for 2026, which showed robust growth across key financial metrics.
The company reported revenue of approximately RMB 8.26 billion for the first half of the year, representing a year-on-year increase of 12.32%. Gross profit rose sharply by 64.14% to around RMB 1.013 billion, while profit attributable to equity shareholders jumped 1.74 times to roughly RMB 373 million. According to the company's announcement, the revenue growth was primarily driven by increased product sales volumes resulting from the stable operation of new facilities at Binhua New Materials, as well as higher selling prices for its main products—propylene oxide, chloropropene, and epichlorohydrin—compared with the same period last year.
Where to begin with the sector outlook? Zhongtai Securities noted that BEFAR GROUP's chlor-alkali segment generated revenue of RMB 3.35 billion in the first half of 2026, up 8.5% year-on-year and accounting for 40.5% of total revenue. The brokerage highlighted that geopolitical tensions in the Middle East have pushed up propane feedstock prices, which in turn supported propylene oxide prices. Data from Baichuan Yingfu shows that the average price of propylene oxide stood at RMB 9,440 per tonne in H1 2026, up 25.1% year-on-year, with the Q2 quarterly average reaching approximately RMB 10,030 per tonne, representing increases of 36.4% compared with the same period last year and 13.3% quarter-on-quarter. Benefiting from its low-cost raw material inventory built up earlier, the company has effectively capitalized on rising product prices, with widening price spreads bolstering gross profits.
Focusing on just one key driver: the company's ability to leverage cost advantages while product prices remain elevated has been instrumental in enhancing profitability during the period. The positive reception from the market reflects growing confidence in the sustainability of the company's operational recovery.