ZONQING Environmental Limited released its interim results for the six months ended 30 June 2026, highlighting a sharp revenue contraction but record new orders.
Financial Highlights • Revenue declined 31.7% year on year to RMB520.25 million, primarily because several major projects neared completion while recently won contracts were still in early-stage execution. • Gross profit fell 47.3% to RMB79.54 million; gross margin narrowed to 15.3% from 19.8% a year earlier, reflecting a lower contribution from high-margin projects and thinner margins on new orders. • The Group swung to a net loss of RMB11.39 million, versus a RMB36.33 million profit in 1H 2025. • Administrative expenses dropped 20.4% to RMB29.80 million due to cost-control measures; selling expenses were stable at RMB13.55 million. • Finance costs decreased 27.1% to RMB23.10 million on lower borrowing rates. • Cash and cash equivalents stood at RMB231.70 million (31 Dec 2025: RMB278.11 million). Bank and other loans totalled RMB763.37 million, lifting the gearing ratio to 0.95x (31 Dec 2025: 0.93x). Net current assets edged down 2.6% to RMB326.88 million.
Segment Performance • City Renewal Services: Revenue slid 42.3% to RMB335.14 million as legacy projects wound down; segment remains the largest revenue contributor (64% of total). • City Operation & Maintenance: Revenue rose 13.9% to RMB138.50 million on increased urban facility O&M demand. • Town Planning & Design: Revenue declined 20.4% to RMB34.09 million as existing projects neared completion. • Cultural Tourism: Revenue fell 26.1% to RMB12.53 million amid softer visitor traffic.
Order Intake & Business Development • 646 bids submitted in 1H 2026, up 51% year on year; success rate maintained at 18.73%. • Newly awarded projects totalled RMB1.57 billion—2.2 times the prior-year period—including: – RMB344.01 million Yongchun Medical Device Innovation & Smart Manufacturing Base main contract. – RMB296.55 million Xinsheng Jiayuan Phase II residential complex in Changchun. – RMB259.24 million interior finishing, electromechanical and landscaping works for Changchun “Galaxy Mile”. – RMB75.08 million O&M contract for Changchun New Area urbanisation PPP project.
Risk Management & Governance • The Group reported no material internal-control weaknesses in 1H 2026 but disclosed a previously unreported RMB87.10 million advance to related party ZIHG in December 2025. The amount was fully repaid by 30 January 2026. Enhanced training, reporting thresholds and system alerts have been implemented to tighten compliance with Hong Kong Listing Rules.
Outlook Management expects China’s 15th Five-Year Plan to sustain long-term demand in urban renewal, ecological restoration and integrated cultural tourism. With a robust backlog and alignment to national policy priorities, the Group will prioritise selective bidding, risk control and profitability recovery in the second half of 2026.
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