Lanzhou LS Heavy Equipment Co

LS Heavy Equipment released its 2026 interim report. Total operating revenue was 2.214 billion yuan, down 21.88% year on year. Net profit attributable to the parent company was negative 203 million yuan, swinging from profit to loss year on year, a decline of 5,255.62%. Net cash flow from operating activities was negative 280 million yuan, a decrease of 203 million yuan year on year. The company's asset-liability ratio rose to 77.93%, gross margin fell to 3.47%, return on equity was negative 8.12%, and diluted earnings per share was negative 0.16 yuan. The number of shareholders was 75,600, and the top ten shareholders held 52.36% of total share capital.

Lanshi Heavy Equipment, along with Chairman Guo Fuyong, General Manager Che Shengwen, and Chief Financial Officer Wei Tongyan, recently received a warning letter from the Gansu Securities Regulatory Bureau. The action was taken because the company made accounting error corrections to its financial data for the first three quarters of 2025, resulting in inaccurate disclosures in the relevant financial reports. The Gansu Securities Regulatory Bureau decided to issue a warning letter to the company, and to impose regulatory talks and warning letters on the three executives, with the matter also recorded in their integrity files. They are required to attend the talks by August 10, 2026, and submit a rectification report within 30 days. This warning is a follow-up to the earlier incident in which the major shareholder, Lanshi Group, had non-operational fund occupation exceeding 6 billion yuan between 2020 and 2024, leading to false records in financial reports. The company and its controlling shareholder were already subject to administrative penalties by the Gansu Securities Regulatory Bureau on April 30, 2026. Lanshi Heavy Equipment was fined 3 million yuan, Lanshi Group was fined 4 million yuan, and at that time Guo Fuyong and Wei Tongyan were also fined 1.1 million yuan and 800,000 yuan respectively.

Lanzhou LS Heavy Equipment disclosed its earnings forecast, expecting a net loss attributable to the parent company of 144 million to 180 million yuan in the first half of 2026, compared with a profit of 3.937 million yuan in the same period last year. The net loss after deducting non-recurring items is expected to be 164 million to 200 million yuan, compared with a loss of 15.3899 million yuan in the same period last year. The company stated that intensified competition in the traditional energy equipment industry led to lower product selling prices, and operating revenue failed to reach the break-even point. At the same time, market development for the new metal materials business fell short of expectations, and insufficient capacity release from new production lines made it difficult to fully amortize fixed costs, jointly resulting in operating losses. In addition, some downstream customers entered bankruptcy liquidation proceedings, and the company accordingly made credit impairment provisions, further widening the loss. The impact of non-recurring gains and losses on net profit in this period is approximately 20 million yuan.