Kangxin New Materials Co Ltd

Kangxin New Materials announced on the evening of September 4 that the company had received a notice of case filing from the China Securities Regulatory Commission because its periodic reports were suspected of violating information disclosure laws and regulations, and the CSRC decided to place the company under investigation. The company said its operating activities are currently normal, and it will actively cooperate with the investigation and fulfil its information disclosure obligations. The company's previously disclosed 2026 interim report showed that it achieved total operating revenue of 198 million yuan in the first half of the year, up 6.56 percent year on year, while net profit attributable to the parent company was a loss of 136 million yuan, compared with a loss of 134 million yuan in the same period last year. As of September 4, the company's share price stood at 3.17 yuan per share, giving it a total market value of 4.262 billion yuan.

Kangxin New Materials released its 2026 interim report, showing total operating revenue of 198 million yuan, up 6.56 percent year on year, but net profit attributable to the parent company was a loss of 136 million yuan, with the loss widening compared with the same period last year. Net cash flow from operating activities was negative 80.72 million yuan, a decrease of 58.80 million yuan year on year. The asset-liability ratio rose to 51.05 percent, gross margin was negative 18.21 percent, return on equity was negative 3.90 percent, and diluted earnings per share was negative 0.10 yuan. The company had 47,200 shareholders, and the top ten shareholders held 43.78 percent of total share capital.

Kangxin New Materials disclosed its 2026 semi-annual report on August 26. In the first half, total operating revenue reached 198 million yuan, up 6.56% year on year, but net profit attributable to the parent company was a loss of 136 million yuan, slightly wider than the loss of 134 million yuan in the same period last year. Net profit after deducting non-recurring items was a loss of 137 million yuan, and net cash flow from operating activities was negative 80.72 million yuan, a marked deterioration from negative 21.92 million yuan a year earlier. The company mainly engages in container flooring, new wood-based composite materials, and prefabricated timber structural building components. As of the end of the first half, the company's inventory book value was 4.17 billion yuan, accounting for 119.94% of net assets, with an inventory write-down provision ratio of 4.26%.

Kangxin New Materials has replied to the Shanghai Stock Exchange's annual report inquiry, addressing issues concerning forestland assets, container flooring business, and going concern capability. As of the end of 2025, the company's consumable biological assets had a book balance of 3.467 billion yuan, and forestland use rights assets had a book value of 1.333 billion yuan, together accounting for about 72 percent of total assets. No inventory write-down provision was made, and the annual auditor considered the net realizable value to be higher than the book value, with sufficient judgment basis. In 2025, container flooring business revenue was 289 million yuan, down 41.33 percent year-on-year, with a gross margin of negative 27.50 percent, mainly due to a significant drop in market selling prices. Although self-produced output increased substantially, the economic benefits have not yet been fully realized. The company's 2025 revenue was 377 million yuan, down 37.24 percent year-on-year, with losses for multiple consecutive years and an expanding loss amount. Net cash flow from operating activities was negative 119 million yuan, the asset-liability ratio rose to 44.90 percent, and interest-bearing liabilities were about 1.693 billion yuan. However, the company stated that there is no risk of mandatory repayment in the next 12 months, and there is no material uncertainty regarding its going concern capability. In addition, the company expects a net loss attributable to the parent company of about 132 million yuan for the first half of 2026, mainly affected by rising costs, declining gross margins, and impairment provisions.