Soft International (2569) H1 2026 earnings summary

Executive summary

• H1 2026 revenue rose 25.0% YoY to RMB549.3m, driven by branded products, contract manufacturing and nonwoven-fabric sales.

• Profit attributable to owners increased 9.2% to RMB33.3m; basic EPS was RMB3.33 cents versus RMB3.46 cents, as weighted average shares increased.

• Two new production lines became operational; the expanded Shishi nonwoven-fabric base is scheduled to begin operations in 2027.

Financial highlights

• Gross profit rose 27.0% to RMB186.9m as cost of sales increased 24.1% to RMB362.4m; gross margin improved to 34.0% from 33.5%.

• Selling and distribution expenses increased 37.6% to RMB116.4m, including online promotion expenses of RMB84.2m, up 40.1% YoY.

• Operating cash flow was a RMB22.5m outflow versus an RMB81.4m inflow in H1 2025, amid higher receivables and inventories.

• Listing expenses were nil versus RMB4.9m; income tax expense fell to RMB3.5m from RMB6.3m, and the effective tax rate declined to 9.6% from 17.1%.

• Profit before tax was RMB36.9m versus RMB36.8m; basic and diluted EPS were RMB3.33 cents versus RMB3.46 cents.

Outlook and guidance

• Priorities include consolidating contract manufacturing, accelerating branded products, deepening customer relationships and improving product quality and operating efficiency.

• R&D priorities include biodegradable materials and environmentally friendly production processes, alongside portfolio optimization and brand-building.

• The expanded Shishi base is expected to complete most construction and seek operating certificates in H2 2026, with operations targeted for 2027.