ZheJiang RIFA Digital Precision Machinery Co Ltd

Rifa Precision Machinery released its 2026 interim report on August 25. By divesting loss-making overseas assets and focusing on its core domestic high-end machine tool business, the company returned to profitability in the reporting period, but revenue contracted significantly due to a narrower consolidation scope. The financial report shows that during the reporting period, the company achieved operating revenue of 310 million yuan, down 56.71 percent year on year. Net profit attributable to the parent company was 50 million yuan, compared with a loss of 221 million yuan in the same period last year. Net profit after deducting non-recurring items was 16 million yuan, compared with a loss of 226 million yuan a year earlier. The turnaround mainly stemmed from changes in the consolidation scope. Subsidiary Airwork was taken over and the equity in Italy's MCM was transferred, so neither is consolidated anymore, eliminating the heavy losses that dragged down results in the same period last year. At the same time, the company sold its plant and equipment in Meizhu, Xinchang, generating asset disposal gains of about 33.44 million yuan, which are non-recurring items. In terms of business structure, digital intelligent machine tools and production lines generated revenue of 267 million yuan, accounting for 85.94 percent of total revenue, with a gross margin of 27.88 percent. Aerospace intelligent equipment and production lines became a new growth driver, with revenue of 31 million yuan, up 130.89 percent year on year, and a gross margin of 41.58 percent. The aerospace services business, which previously accounted for a very high share, is no longer consolidated in this period, causing overseas revenue to plunge 92.70 percent year on year to 39 million yuan, while domestic revenue rose 43.71 percent year on year to 272 million yuan. Looking ahead to the second half, the company faces challenges including the risk that receivables related to Airwork and MCM cannot be recovered, high dependence on external suppliers for core functional components, and a controlling shareholder equity pledge ratio close to 100 percent.

The machine tool concept continued to be active in early trading on August 12, with Huadong CNC hitting three consecutive daily limit ups, while Rifa Precision Machinery and Shenyang Machine Tool hit their daily limit ups, and many other stocks rose in tandem. Recently, Pinghu in Zhejiang held the first "Machine Tool Plus" supply-demand matchmaking event for hundreds of industries and thousands of enterprises, releasing the Zhejiang Province Machine Tool Supply List. Five cooperation projects were signed on site, with total procurement value exceeding 100 million yuan. On the supply side, a research report from Zhongtai Securities pointed out that Fanuc and Mitsubishi CNC systems will face shortages starting April 2026, opening a window for domestic independent and controllable alternatives. On the demand side, capital spending is robust in AI computing, semiconductors, and new energy vehicle components, driving a recovery in machine tool demand. In June 2026, domestic metal-cutting machine tool output grew 18.1 percent year-on-year, with cumulative growth of 6.9 percent from January to June. Huachuang Securities believes that the localization of high-end precision ball screws will accelerate, benefiting domestic manufacturers.