Shandong Molong Petroleum Machinery Company Ltd. reported a mixed set of interim results for the six months ended 30 June 2026. Group operating revenue surged 57.10 % year on year to RMB 1.25 billion (USD ~173 million), underpinned by robust export demand and full-capacity utilisation. Overseas sales climbed 76.91 % to RMB 0.45 billion, lifting the export share of total revenue to 36.26 % from 32.20 % a year earlier, while domestic sales advanced 47.69 % to RMB 0.80 billion.
Net profit attributable to shareholders dropped 65.38 % to RMB 4.21 million, largely squeezed by a 57.24 % rise in cost of sales, a 55.03 % jump in finance costs to RMB 66.76 million, and a RMB 12.19 million foreign-exchange loss. Net margin fell to 0.34 % from 1.53 %. After deducting extraordinary gains, core profit shrank to RMB 0.41 million, down 47.53 %.
Operating cash flow plummeted 91.98 % to RMB 20.45 million, reflecting a sharp recovery of prior-year passive financial assistance inflows and increased working-capital deployment. Net cash outflow from investing activities widened to RMB 84.59 million, driven by higher capex, while financing outflows narrowed to RMB 16.64 million amid a more balanced loan portfolio.
Total assets rose 5.71 % from end-2025 to RMB 2.84 billion, supported by a RMB 208 million increase in inventories and the RMB 166 million acquisition of land and buildings via debt restructuring. Net gearing edged up to 82.28 % as short-term borrowings expanded to RMB 1.38 billion.
Segment-wise, pipe products remained the mainstay, contributing 95.48 % of revenue. Sales to China’s four major state-owned oil companies and 50-plus overseas markets continued to underpin topline growth. Nevertheless, group gross margin slipped 0.08 ppt to 9.71%, while domestic margin compressed to 7.33% (-1.37 ppt) and offshore margin improved 1.80 ppt to 13.88 %.
Post-period, on 29 July 2026 Shandong Molong raised HK$115.68 million (RMB 106.4 million) via a private placement of 25.68 million H-shares at HK$4.58 each, earmarking 90 % of proceeds for debt repayment and 10 % for working capital.
No interim dividend was declared. Management highlighted risks from raw-material price volatility, FX swings and ongoing litigation provisions (RMB 4.98 million).
During H1, the company incorporated three new wholly owned units—Shandong Molong Energy Technology, Precision Technology and Petroleum Technology—and completed a major debt-to-asset swap that reduced receivables by RMB 361 million in exchange for land, plant and equipment.
Despite the near-term profit squeeze, Shandong Molong continues to expand overseas, with 11 new export markets added and a “five-in-one” global sales model combining products, services, trade, warehousing and offices. Management sees long-term demand support from China’s energy-security agenda and diversified industrial use of seamless steel pipes.
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