Western Superconducting Technologies (688122) H1 2026 earnings summary

Executive summary

• Revenue for H1 2026 was RMB 2.61 billion, down 4.07% year-over-year; net profit attributable to shareholders was RMB 345 million, down 36.77%.

• Gross margin declined due to product mix adjustment, lower sales prices, and increased R&D expenses.

• Cash flow from operations decreased by 165.66% year-over-year, mainly due to lower collections and higher procurement payments.

• The company maintained high R&D investment, with R&D expenses up 74.33% year-over-year, accounting for 9.94% of revenue.

Financial highlights

• Operating income: RMB 2.61 billion, down 4.07% year-over-year.

• Net profit attributable to shareholders: RMB 345 million, down 36.77% year-over-year.

• Basic and diluted EPS: RMB 0.5315, down 36.77% year-over-year.

• Gross margin and net margin both declined due to lower product prices and higher R&D costs.

• Total assets at period end: RMB 16.60 billion, up 10.03% from year-beginning.

Outlook and guidance

• The company is actively expanding into new application areas and accelerating R&D and industrialization of superconducting, titanium alloy, and high-temperature alloy products.

• Management expects continued pressure on profitability due to market competition and downstream demand fluctuations but is positioning for long-term growth in strategic sectors.