Hebei Haiwei Electronic New Material Technology Co., Ltd. (HAIWEI ELEC) reported a marked slowdown for the six months ended 30 June 2026, underscored by weaker top-line growth, sharply lower profitability and rising administrative costs.

Revenue and Gross Margin • Group revenue fell 10.9% year on year to RMB163.54 million, reflecting intensified domestic competition that pulled down average selling prices, particularly for thin and ultra-thin capacitor base films. • Gross profit contracted 34.3% to RMB42.06 million; gross margin slid to 25.7% from 34.9% a year earlier.

Earnings • Profit attributable to shareholders dropped 85.3% to RMB5.42 million (1H25: RMB36.86 million). • Basic and diluted EPS both decreased to RMB0.03 from RMB0.30. • Net foreign-exchange losses widened to RMB13.87 million (1H25: RMB0.95 million), primarily due to RMB appreciation against HKD and translation of IPO proceeds, eroding the bottom line. • Administrative expenses more than doubled to RMB18.11 million, driven by post-listing compliance costs.

Segment Performance • Capacitor base films remained the largest revenue contributor at 75.5% of sales, but turnover fell 14.0% to RMB123.40 million. – Thin base films revenue dropped 11.4% to RMB95.61 million. – Ultra-thin base films plunged 53.7% to RMB7.42 million. • Metallized films revenue was broadly flat at RMB23.71 million. • Other products, including recycled granules, generated RMB16.43 million (-0.5% YoY).

Cost Structure • Cost of sales inched up 1.6% to RMB121.48 million, outpacing revenue contraction and compressing margins. • Raw materials accounted for 62.0% of revenue (1H25: 52.8%); unit cost of capacitor base films eased 0.9%, partially mitigating price declines. • Manufacturing costs fell 17.4% to RMB15.82 million, while direct labour climbed 22.2% to RMB4.30 million.

Balance Sheet and Liquidity • Cash and cash equivalents rose 18.3% since year-end to RMB523.53 million, bolstered by a RMB176 million refund of equipment deposits and HKD25.11 million from partial over-allotment option exercise in January 2026. • Net current assets increased to RMB896.60 million (31 Dec 2025: RMB761.37 million); current ratio improved to 27.26x. • Gearing ratio (total liabilities/total assets) eased to 2.91% from 3.12%, reflecting repayment of bank borrowings. • Capital commitments dropped sharply to RMB0.84 million after cancelling a RMB1 billion production-line procurement contract in March 2026.

Cash Flow and Investments • Capital expenditure reached RMB70.36 million (1H25: RMB5.14 million), mainly for land use rights tied to the planned Southern China Facility and a RMB20.00 million minority stake in Sunshine Hydrogen Technology. • No dividends were declared for the period.

Operational Developments • Construction preparations for the Southern China Facility advanced with acquisition of 79,137 sq m of industrial land in Zhejiang for RMB47.96 million. • Headcount stood at 231 employees; research and development spend fell 17.7% to RMB7.08 million amid project-cycle adjustments.

Outlook and Strategy Management will prioritise expansion of high-end ultra-thin capacitor film capacity, deepen vertical integration, pursue domestic sourcing of electrical-grade polypropylene, and continue capacity build-out using IPO proceeds. Entry into AI computing-power leasing remains under study with no binding commitments to date.

Regulatory & Governance The company reported full compliance with the HKEX Corporate Governance Code and the Model Code for securities dealings. No share repurchases occurred in the period, and no material subsequent events were identified up to the results announcement date.