LAUNCH TECH released its 2026 interim report showing solid top-line expansion tempered by profit compression amid higher costs and finance expenses.
Revenue and Profitability • Operating revenue reached RMB 1.07 billion, up 9.1% year-on-year. • Gross profit rose 5.2% to roughly RMB 502 million, with the gross margin easing to 47% (1H25: 48%) on cost pressures. • Net profit attributable to shareholders declined 10.3% to RMB 174.71 million; net margin contracted to 17% from 20% a year earlier. • Basic EPS decreased to RMB 0.426 (1H25: RMB 0.469).
Cost and Expense Dynamics • Operating costs increased 12.8% to RMB 568.52 million. • Selling expenses climbed 16.6% to RMB 156.59 million, reflecting market-expansion initiatives. • Finance costs surged to RMB 22.73 million (1H25: RMB 3.69 million), largely driven by higher borrowings and foreign-exchange losses. • R&D spending remained elevated at RMB 98.47 million (1H25: RMB 97.60 million), supporting product and AI development.
Segment Performance • Equipment: Revenue rose 3.1% to about RMB 900 million; X-431 smart diagnostic units grew 4.8% to 169,000. • Software: Sales jumped 67.9% to approximately RMB 120 million, lifting its revenue contribution to 11%. • AI Services: Remote diagnosis generated RMB 16.1 million (+45.7%) on 1.17 million service orders; AI-powered offerings advanced toward wider commercial rollout. • Data Services: Revenue almost doubled to RMB 15.4 million (+93.6%) on expanding monetisation of the Group’s 2.3 billion accumulated diagnostic reports.
Balance-Sheet Movements • Total assets increased 17% since end-2025 to RMB 2.53 billion, led by higher cash (RMB 593.48 million, +9.1%), inventories (RMB 378.54 million, +41.6%) and investment property. • Total liabilities expanded 40% to RMB 1.30 billion; short-term borrowings rose to RMB 192.35 million from RMB 76.64 million. • Gearing ratio (total liabilities / shareholders’ equity) climbed to 1.06 (end-2025: 0.76). • Shareholders’ equity was stable at RMB 1.22 billion.
Cash Flow • Operating activities generated RMB 127.79 million (-32.4% YoY). • Net investing outflow was RMB 33.10 million, mainly for property, equipment and R&D. • Financing outflow totaled RMB 37.10 million, reflecting dividends and loan repayments. • Period-end cash and cash equivalents stood at RMB 583.62 million, up RMB 47.86 million from year-end 2025.
Capital Actions and Dividends • The board declared an interim cash dividend of RMB 0.29 per share (1H25: RMB 0.31), payable on or before 18 September 2026. • In May 2026, the company completed full circulation of its H shares, converting 194.24 million unlisted shares into H shares; post-conversion, H shares represent 85.54% of total issued shares.
Operational Priorities Management reiterated focus on a four-pillar strategy—equipment, software, AI services and data—to deepen AI and big-data deployment across automotive diagnostics, maintenance and value-added services while leveraging a global connected-vehicle base exceeding 420 million units.
No material contingent liabilities or post-balance-sheet events were reported. The audit committee has reviewed the interim financial statements, and the company stated compliance with Hong Kong corporate governance and disclosure requirements.
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