Three major chemical and equipment firms, each with strategic investments in the hydrogen energy sector, have recently released their financial forecasts for the first half of 2026, revealing starkly different performance trajectories.
Jiangsu Huachang Chemical Co., Ltd. (SZ: 002274) has reported a remarkable turnaround, with non-GAAP net profit soaring by 2583.07%. In contrast, Sinopec Oilfield Equipment Corporation (SZ: 000852) has posted a loss, its first in a decade, while Lanzhou LS Heavy Equipment Co., Ltd. (SH: 603169) anticipates a net loss exceeding 100 million yuan.
Financial Performance Highlights
Huachang Chemical's performance rebounded strongly, with net profit attributable to shareholders reaching approximately 123 million yuan, a year-on-year increase of 1025.93%. The company's return to profitability is attributed primarily to rising product sales prices and increased sales volume following the commissioning of its new polyol project. This project, with an annual capacity of 322,400 tons and a gross margin of 38%, utilizes synthesis gas and hydrogen sourced internally from the company's existing facilities.
The performance of LS Heavy Equipment and Sinopec Oilfield Equipment, both equipment manufacturers, has been notably impacted by a downturn in their traditional sectors. LS Heavy Equipment expects a net loss between 144 million and 180 million yuan for the period, compared to a profit of 3.937 million yuan a year earlier. The loss is attributed to intensified competition, lower product prices, underperforming new metal materials business lines, and a significant credit impairment loss provision related to a major EPC project for a client, Panjin Haoye Chemical Co., Ltd., which has entered bankruptcy proceedings.
Sinopec Oilfield Equipment forecasts a net loss between 5.5 million and 7.5 million yuan, with a non-GAAP net loss projected between 12 million and 15 million yuan. This marks its first loss in ten years. Key factors include a slowdown in upstream oil and gas exploration investment, reduced demand for equipment and services, significant foreign exchange losses due to RMB appreciation, and increased credit impairment and deferred tax expenses.
Hydrogen as a Strategic Diversion
All three companies have identified hydrogen energy as a strategic "second growth curve," driven by national low-carbon policies and growth ceilings in their traditional businesses. However, their hydrogen operations remain in early-stage development and are far from being significant profit contributors.
Huachang Chemical's hydrogen activities are centered on its subsidiary, Suzhou Huachang Energy Technology Co., Ltd. Its focus is on hydrogen fuel cell stacks, engines, testing systems, and leveraging its by-product hydrogen purification. The company has built hydrogen refueling and filling stations and has delivered hydrogen-powered heavy-duty trucks and buses for demonstration projects. Nevertheless, the company acknowledges that commercial market expansion remains limited, and hydrogen is still positioned as a "future industry under cultivation."
LS Heavy Equipment and Sinopec Oilfield Equipment have leveraged their equipment manufacturing expertise to develop comprehensive hydrogen equipment portfolios covering production, storage, and refueling. LS Heavy Equipment's products include alkaline and PEM electrolyzers, hydrogen storage containers, and heat exchangers. Sinopec Oilfield Equipment manufactures hydrogen compressors, dispensers, control systems, large-diameter hydrogen pipelines, and key components for electrolyzers.
Despite these efforts, the financial contribution from hydrogen remains minimal. In 2025, LS Heavy Equipment's new energy equipment orders, including nuclear and hydrogen, grew by 57.96% to 1.389 billion yuan, but specific hydrogen revenue was not detailed. Sinopec Oilfield Equipment's hydrogen equipment revenue was 70 million yuan, accounting for only 0.98% of total revenue, with a negative gross margin of -3.49%. While both companies report growing order books, translating these into profits will take time.
Divergent Paths Forward
The commercial inflection point for the hydrogen industry has not yet arrived, posing a common challenge. Huachang Chemical benefits from a profitable traditional chemical business that can fund hydrogen R&D and demonstration projects, creating a virtuous cycle. Its internally produced hydrogen can also be consumed within its operations if external sales are slow.
In contrast, LS Heavy Equipment and Sinopec Oilfield Equipment face a dual squeeze. Their traditional equipment businesses are under pressure from declining demand, while their hydrogen ventures are not yet profitable. The new business cannot offset the old, and continued investment in hydrogen strains cash flow. Although Sinopec Oilfield Equipment has the advantage of its parent company's extensive application scenarios, such as refueling stations and pipelines, its hydrogen business progress remains slow.
Hydrogen represents the future, but that future is not here yet. For these chemical companies, successfully cultivating hydrogen as a second growth curve depends not only on the pace of the hydrogen industry's development but also on the resilience of their core businesses to sustain this long-term investment. Those with stronger traditional operations and more efficient hydrogen resource utilization pathways are better positioned to endure until the hydrogen industry matures.
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