Dongjiang Environmental Company (895) H1 2026 earnings summary

Executive summary

• Operating revenue for the first half of 2026 was RMB1,358 million, down 9.48% year-over-year, mainly due to a sharp decline in rare and precious metals recovery revenue and continued market downturn in harmless treatment services.

• Net loss attributable to shareholders narrowed by 3.5% year-over-year to RMB268 million, with improved gross profit margin in recycling business offset by persistent pressure in core businesses.

• Net cash flows from operating activities increased 277.17% year-over-year to RMB89.8 million, reflecting improved cash management.

• The company continued to invest in technological innovation, securing 27 new patents and launching cost reduction and efficiency enhancement initiatives.

Financial highlights

• Gross profit margin rose to 4.70% from 3.24% year-over-year, driven by higher metal prices and improved recycling business profitability.

• Selling expenses decreased to RMB40.3 million, while administrative expenses increased to RMB179.5 million due to personnel adjustments.

• Finance costs dropped to RMB71.5 million, reflecting lower interest rates and exchange gains.

• Net current assets improved to RMB-865 million from RMB-1,158 million at year-end 2025; cash and cash equivalents stood at RMB1,003 million.

• Gearing ratio increased to 73.05% from 71.52% at year-end 2025.

Outlook and guidance

• The company will focus on stabilizing its hazardous waste disposal business, deepening market-oriented reforms, and expanding new business areas in resource recycling.

• Continued emphasis on cost reduction, efficiency enhancement, and technological breakthroughs is expected.