Hangzhou First Applied Material (603806) H1 2025 earnings summary

Executive summary

• Revenue for the first half of 2025 was ¥7.96 billion, down 26.06% year-over-year, with net profit attributable to shareholders at ¥495.75 million, a 46.60% decrease year-over-year.

• The decline was mainly due to lower sales prices in the photovoltaic (PV) sector, despite stable sales volumes for PV encapsulation film.

• The company maintained positive profitability in a challenging PV market, leveraging its leading market position and cost control.

• Electronic materials and functional film businesses showed growth, with electronic materials sales volume up 21.62% and revenue up 17.93% year-over-year.

Financial highlights

• Operating income: ¥7.96 billion, down 26.06% year-over-year.

• Net profit attributable to shareholders: ¥495.75 million, down 46.60% year-over-year.

• Operating cash flow: -¥888.73 million, compared to ¥904.71 million in the prior year period.

• Basic EPS: ¥0.19, down 47.22% year-over-year.

• Gross margin and net margin declined due to price pressure in PV products.

Outlook and guidance

• The PV industry is expected to remain under pressure with continued low prices and intense competition, but global demand, especially in emerging markets, is forecast to grow.

• The company will focus on expanding overseas PV film capacity and accelerating R&D for new PV and electronic material technologies.

• Electronic materials are expected to become a new growth driver, leveraging AI and high-end PCB demand.