Shandong Molong Petroleum Machinery Company Limited reported a strong top-line expansion but a sharp earnings contraction for the six months ended 30 June 2026 (1H26).
Revenue and Profitability • Group revenue rose 57.10% year on year to RMB1.25 billion, supported by higher order flow and full-capacity utilisation. • Gross profit increased 55.80% to RMB121.63 million, keeping gross margin broadly flat at 9.70% (1H25: 9.78%). • Net profit attributable to shareholders fell 65.38% to RMB4.21 million, weighed down by higher finance costs and operating expenses. • Finance costs climbed 55.07% to RMB66.76 million, largely reflecting a rise in interest expenses to RMB55.20 million and an adverse exchange difference of RMB12.19 million. • Earnings per share declined to RMB0.0053 from RMB0.0152; no interim dividend was declared.
Segment Performance • Pipe products remained the mainstay, contributing RMB1.20 billion, or 95.49% of total revenue. • Revenue from “three kinds of pumping units” was RMB14.12 million, while “others” contributed RMB42.48 million. • Domestic sales accounted for RMB798.60 million (63.73% of total), with overseas sales growing to RMB454.30 million, up more than 70% year on year.
Operating Metrics • Operating profit contracted to RMB2.85 million (1H25: RMB4.78 million), pushing the operating margin down to 0.23% from 0.60%. • Total operating costs expanded 56.18% to RMB1.25 billion, in line with revenue growth. • Administrative expenses rose 49.39% to RMB27.69 million, R&D spending increased 6.67% to RMB11.83 million, and selling expenses were broadly stable at RMB6.84 million.
Balance Sheet Highlights (30 June 2026) • Total assets stood at RMB2.84 billion, up 5.72% from year-end 2025. • Cash and cash equivalents declined to RMB218.39 million from RMB273.49 million, while inventories expanded 37.03% to RMB773.95 million. • Current liabilities grew to RMB2.25 billion, resulting in net current liabilities of RMB391.10 million and a current ratio of 0.83. • Total borrowings (short-term and long-term payables) reached RMB1.45 billion, contributing to an increase in total liabilities to RMB2.33 billion. • Shareholders’ equity edged up to RMB502.63 million after incorporating the period’s profit and a positive RMB0.54 million movement in other comprehensive income.
Cash Flow and Capital Commitments • No capital expenditure commitments were outstanding at the period end, and there were no significant investments or acquisitions during 1H26. • The group recorded no contracted but unrecognised capital expenditures and reported no major disposals.
Post-Period Event On 29 July 2026 the company completed a placing of 25.68 million new H shares at HKD4.58 each, raising net proceeds of approximately HKD115.68 million. Around 90% of the funds will be applied to debt reduction, with the remainder allocated to working capital.
Management Commentary and Industry Context Management highlighted robust demand for energy-sector equipment, strong growth in overseas markets, and ongoing cost-control initiatives. The company noted supportive domestic policies aimed at “stabilising oil output and increasing gas production”, coupled with rising demand for high-grade seamless steel pipes across power, chemical and high-end equipment sectors.
Outlook While Shandong Molong anticipates continued market demand and intends to deepen its “five-in-one” overseas sales model, the interim report offers no quantitative guidance for full-year performance. The group plans to emphasise product quality, cost discipline and technological upgrades to navigate industry volatility.
Dividend The board does not recommend the payment of an interim dividend for 1H26.
Comments