Nanfang Communication Holdings Limited reported solid interim results for the six months ended 30 June 2026, underpinned by stronger demand for optical fibre cables and enhanced product mix.
Financial Performance • Revenue rose 21.90% year on year to RMB 226.13 million, driven by higher sales of optical fibre cables, optical distribution network devices and pre-painted steel sheet. • Gross profit advanced 58.40% to RMB 54.34 million; gross margin widened to 24.0% from 18.5% a year earlier, reflecting improved product mix and firmer industry pricing. • Profit and total comprehensive income increased 45.97% to RMB 38.07 million, translating into basic earnings per share of RMB 0.023 versus RMB 0.016 in 1H 2025. • Net other income surged to RMB 19.79 million (1H 2025: RMB 7.11 million), supported by higher electricity sales and gains on disposal of other materials. • Selling and distribution expenses and administrative expenses grew 29.70% and 30.30% respectively, aligned with expanded operations and additional depreciation from a completed construction site. • Finance costs declined 17.40% to RMB 3.51 million owing to lower borrowing rates. • Share of profit from the 49%-owned associate (optical fibre manufacturing) more than doubled to RMB 15.24 million; profit contribution from the 51%-owned joint venture (optical fibre preforms) fell 36.80% to RMB 0.90 million.
Balance Sheet & Liquidity • Cash, bank deposits and restricted balances totalled RMB 660.00 million at 30 June 2026, up 56.50% from year-end 2025, bolstering liquidity for expansion. • Interest-bearing bank borrowings increased to RMB 322.23 million (31 December 2025: RMB 179.21 million) with variable rates between 2.11% and 3.30%. • Gearing ratio (total liabilities/total equity) rose to 72.3% from 56.6% over six months, reflecting higher leverage to fund growth. • Capital commitments for property, plant and equipment reached RMB 26.77 million, mainly linked to the Nanfang Science and Technology Ecological Industrial Park redevelopment in Changzhou.
Cash Flow • Net cash from operating activities amounted to RMB 33.00 million. • Investing cash outflow was limited to RMB 0.55 million as disposal of wealth-management products (RMB 50.32 million) and withdrawal of restricted deposits offset capital expenditure of RMB 4.50 million. • Financing inflow totalled RMB 139.49 million, driven by new bank loans of RMB 150.00 million.
Dividend The Board did not declare an interim dividend for 1H 2026.
Industry & Outlook Management highlighted a structural shift in the global optical fibre cable market toward “tight supply and rising volumes and prices.” Forecasts indicate a 16.4% global supply-demand gap in 2026, well above the previous peak in 2017-2018. Domestic policy initiatives—such as China’s push for 5G-A, 10-gigabit optical networks and AI computing infrastructure—are expected to sustain robust demand. Nanfang Communication plans to deepen cooperation with major Chinese telecom operators, expand into high-value data-centre and industrial internet segments, and accelerate R&D in high-density and next-generation fibre technologies to capture forthcoming growth opportunities.
Regulatory & Corporate Governance The company maintained full compliance with the Hong Kong Listing Rules’ Corporate Governance Code and Model Code during the period. Public float levels remained sufficient, and there were no material acquisitions, disposals or post-period events requiring disclosure.
Capital Structure Share capital stood unchanged at HKD 1.63 million (1.63 billion shares). No outstanding share options exist, and no purchases, sales or redemptions of listed securities were undertaken during the period.
Conclusion Stronger revenue momentum, margin expansion and increased associate contributions underline Nanfang Communication’s improving operational leverage as the optical fibre industry enters a favorable cycle. The company’s fortified cash position and ongoing capacity investments position it to benefit from accelerating domestic and global demand for high-speed fibre connectivity.
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