Honghe Technology Ends RMB 600 Million Cangxi Electronic Cloth Project, Returns Land; H1 Net Profit Up 334%

After the market close on August 13, Honghe Technology disclosed multiple announcements, planning to terminate an outward investment project with a total investment of approximately RMB 600 million and return the state-owned land use rights of the corresponding plot. The project, "Annual Production of 72 Million Meters of High-Performance Electronic-Grade Glass Fiber Cloth Development and Production Project," was approved by Honghe Technology in November 2023 and was to be implemented through its wholly-owned subsidiary Sichuan Honghe Electronic Materials Co. , Ltd. in the Baili Industry-City Integration New Area of Cangxi County. In April 2024, Sichuan Honghe signed a state-owned construction land use right transfer contract with the Cangxi County Natural Resources Bureau, acquiring 32,304 square meters of industrial land for a transfer price of RMB 3.11 million, and obtained the real estate certificate in May of the same year.

The company stated that, considering factors such as future strategic layout, long-term development, industrial supporting, synergy effects, and comprehensive costs, it plans to terminate the relevant investment agreement and return the land use rights.

The 2026 semi-annual report disclosed on the same day shows that Honghe Technology achieved operating revenue of RMB 1.048 billion in the first half, up 90.39% year-on-year; net profit attributable to shareholders of the listed company was RMB 379 million, up 334.32%; net profit after deducting non-recurring gains and losses was RMB 373 million, up 350.88%; basic earnings per share was RMB 0.42. As of the end of June 2026, the company's total assets were RMB 5.893 billion, up 79.51% from the end of 2025; net assets attributable to shareholders were RMB 2.949 billion, up 78.76% from the end of 2025; weighted average return on equity was 15.28%, an increase of 9.43 percentage points year-on-year.

The company said the main reasons for the performance growth were that during the reporting period, demand for ordinary E-glass electronic-grade glass fiber cloth was strong, with prices rising year-on-year, while demand for special electronic cloth such as low-dielectric-constant and low-thermal-expansion-coefficient electronic cloth was also strong. The company's capacity continued to increase, and sales volume and unit prices rose year-on-year. These products have high technical barriers and added value, driving increases in revenue and net profit. In the first half, the company optimized its product structure, reducing production of thick and thin E-cloth and shifting to special electronic cloth and ultra-thin, extremely thin high-end cloth. It also planned to invest in a special electronic yarn project and a high-end electronic cloth project, with expansion implemented by subsidiary Huangshi Honghe. During the period, net cash flow from operating activities was RMB 279 million, up 189.10% year-on-year. The company will not distribute profits for the first half of 2026, nor will it implement capital reserve conversion to increase share capital.