Red Avenue New Materials Group (603650) Q2 2026 earnings summary

Executive summary

• Revenue for H1 2026 reached RMB 2.14 billion, up 29.10% year-over-year; net profit attributable to shareholders was RMB 389 million, up 10.86% year-over-year.

• Electronic chemicals business revenue grew 56.89% year-over-year, now 32.44% of total revenue, with segment profit up nearly 180%.

• Rubber chemicals and biodegradable materials businesses maintained stable growth, with rubber chemicals revenue up 14% year-over-year.

• R&D investment increased, with 688 patent applications and 500 granted patents as of June 30, 2026.

• Company advanced internationalization, with H-share listing application submitted and CSRC registration obtained.

Financial highlights

• Operating income: RMB 2,136 million (+29.10% YoY); net profit: RMB 389 million (+10.86% YoY).

• Operating cash flow: RMB 41.6 million, down 71.89% YoY due to rapid sales growth and timing differences.

• Basic and diluted EPS: RMB 0.63 (+6.78% YoY); ROE: 9.04% (down 1.16pp YoY).

• Total assets: RMB 9.53 billion (+3.39% from year-end 2025); net assets attributable to shareholders: RMB 4.20 billion.

• Non-recurring profit: RMB 28.1 million, mainly from asset disposals and government grants.

Outlook and guidance

• Electronic chemicals, especially semiconductor photoresists and supporting materials, expected to remain key growth drivers.

• Company will continue to invest in R&D and international expansion, focusing on high-value-added segments.

• Market uncertainties in display panels and raw material price volatility remain, but company aims to strengthen supply chain and customer base.