Hilong (1623) H2 2025 earnings summary

Executive summary

• Achieved total revenue of RMB 4,875.2 million in 2025, a 4.4% increase year-over-year, driven by growth in Oilfield Services and Offshore Engineering, despite a sharp decline in Oilfield Equipment Manufacturing.

• Gross profit rose 6.9% to RMB 1,199 million, with gross margin improving to 24.6%.

• Ended the year with a net loss of RMB 320.0 million, reversing a profit in 2024, mainly due to a significant impairment loss on a vessel and increased administrative expenses.

• No dividend was recommended for the year.

• Focused on high-end markets, technological innovation, and digital transformation across all business lines.

Financial highlights

• Oilfield Equipment Manufacturing & Services revenue fell 37.6% year-over-year to RMB 1,325.1 million, mainly from lower international drill pipe sales and prices, with a gross profit margin of 26%.

• Oilfield Services revenue grew 32.3% to RMB 2,090.3 million, led by tubing/casing trading and integrated drilling services, with a gross profit margin of 24%.

• Offshore Engineering Services revenue surged 52% to RMB 1,460 million, with strong project execution and new contracts.

• Administrative expenses rose 32.5% to RMB 730.4 million, mainly from higher staff costs.

• Impairment loss of RMB 322 million recognized on a vessel, classified as held for sale.

Outlook and guidance

• Plans to strengthen presence in US/Canada, Middle East, Southeast Asia, and South America high-end markets, focusing on differentiated, high-tech drilling tools.

• Aims to expand turnkey project services and digital transformation in Oilfield Services, targeting new contracts in Africa, South America, and Asia.

• Offshore Engineering to pursue specialized EPCIC projects, enhance digital and R&D capabilities, and strengthen market presence in Southeast Asia and West Africa.

• Continued R&D in high-strength, sulfur-resistant drill pipes and digital transformation initiatives.

• Oilfield services to expand environmental protection businesses, with emphasis on technology-driven growth.