Zhejiang Sanwei Rubber Item Co

Sanwei Holdings released its 2026 interim report on August 27. Relying on its four major business segments of rubber products, rail transit, chemical fiber, and new materials, the company was affected by sharply rising chemical raw material prices and increased depreciation from new projects. During the reporting period, revenue maintained growth but profit losses widened significantly. The financial report shows that during the reporting period, the company achieved operating revenue of 2.554 billion yuan, up 13.71 percent year on year. Net profit attributable to the parent company was negative 186 million yuan, compared with negative 19 million yuan in the same period last year, with the loss widening markedly. Net profit after deducting non-recurring items was negative 186 million yuan. Notably, net cash flow from operating activities was 151 million yuan, a sharp year-on-year increase of 4,340.88 percent, mainly due to a reduction in margin and letter of credit guarantee payments. In terms of business structure, the rubber products segment reduced costs and improved efficiency through intelligent technical upgrades and expanded into overseas markets such as South Africa and Peru. The rail transit segment benefited from accelerated national railway construction, with subsidiary Guangxi Sanwei's sales revenue rising 15.74 percent year on year to 122 million yuan. The chemical fiber industry reduced waste silk output through equipment upgrades, and production steadily increased. However, the new materials segment became the main source of losses. Subsidiary Inner Mongolia Sanwei posted a net loss of 270 million yuan in the first half of the year due to industry price fluctuations and a substantial increase in depreciation expenses for the BDO project. The change in performance was mainly dragged down by two factors. First, international instability led to sharply higher chemical raw material prices. Second, capacity release at the Inner Mongolia new materials base was accompanied by high depreciation, and combined with BDO product price fluctuations, this caused severe phased losses in the segment. Looking ahead, as the national eight vertical and eight horizontal railway construction advances and markets along the Belt and Road Initiative expand, rail transit demand is expected to remain stable. Although the chemical new materials segment faces short-term pressure, as supporting semi-coke facilities and downstream PBAT and PTMEG projects are planned and implemented, integrated cost advantages are expected to be gradually released.

Sanwei Holdings disclosed its performance forecast, expecting a net loss attributable to the parent company of 140 million to 190 million yuan in the first half of 2026, compared with a loss of 18.6306 million yuan in the same period last year. The net loss after deducting non-recurring items is expected to be 137 million to 187 million yuan, compared with a loss of 21.3999 million yuan in the same period last year. The company stated that the main reason for the loss is that although the BDO business of its subsidiary Inner Mongolia Sanwei New Materials Co., Ltd. saw year-on-year growth in production, sales volume, and operating revenue, the product gross margin remained under continuous pressure. Coupled with a significant year-on-year increase in depreciation expenses after the project was transferred to fixed assets, the operating performance of this business further declined, thereby affecting the company's overall profitability.