Dirui Industrial Co (300396) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2026 was ¥177.79 million, down 2.54% year-over-year; net loss attributable to shareholders was ¥1.14 million, compared to a net profit of ¥15.68 million in Q1 2025.

• Domestic business remained stable with some recovery, but international revenue recognition changes and geopolitical factors delayed order recognition, leading to a decline in international revenue.

• R&D expenses increased over 10% year-over-year due to project optimization and termination of low-efficiency projects, impacting profit.

• Significant decrease in exchange gains due to currency fluctuations negatively affected profit.

Financial highlights

• Operating cash flow improved to -¥21.34 million from -¥41.72 million year-over-year.

• Gross margin improved as domestic business stabilized, but overall profitability declined due to higher R&D and lower international revenue.

• Basic and diluted EPS were -0.0042, down from 0.0575 year-over-year.

• Total assets at quarter-end were ¥2.62 billion, down 5.42% from year-end 2025.

• Owner's equity attributable to shareholders was ¥1.53 billion, down 0.12% from year-end 2025.

Outlook and guidance

• Company is strengthening internal controls, compliance, and revenue recognition processes to address regulatory and operational risks.

• Focus remains on optimizing R&D and improving domestic business compliance and efficiency.