Hangzhou First Applied Material (603806) Q2 2026 earnings summary

Executive summary

• Revenue for H1 2026 was ¥6.99 billion, down 12.20% year-over-year due to lower sales volume and prices in photovoltaic (PV) encapsulant and backsheet products.

• Net profit attributable to shareholders rose 69.89% year-over-year to ¥842 million, driven by improved profitability in PV, electronic, and lithium battery materials.

• Operating cash flow turned positive to ¥1.28 billion, mainly due to lower raw material procurement costs and improved payment terms.

• The board proposed an interim cash dividend of ¥1.20 per 10 shares, totaling ¥312.7 million, representing 37.13% of net profit.

Financial highlights

• Operating income: ¥6.99 billion (–12.20% YoY); net profit: ¥842 million (+69.89% YoY); operating cash flow: ¥1.28 billion (vs. –¥888 million YoY).

• Gross margin improved due to cost control and product mix optimization.

• Basic EPS: ¥0.32 (+68.42% YoY); diluted EPS: ¥0.31 (+72.22% YoY).

• Net assets attributable to shareholders: ¥16.76 billion (+1.93% from year-end 2025).

Outlook and guidance

• PV industry expected to see structural recovery in H2 2026, with domestic and emerging overseas demand improving.

• Electronic materials to benefit from AI hardware and high-end PCB demand; lithium battery materials to see growth from energy storage and robotics sectors.

• Company to focus on high-value products, global expansion, and R&D in next-generation materials.