Guangdong Wencan Die Casting Co Ltd

Wencan Group released its 2026 interim report, with net profit attributable to the parent swinging from profit to loss, recording a loss of 216 million yuan, down 1746.84% from 13.11 million yuan in the same period last year. In the first half, the company achieved operating revenue of 2.8 billion yuan, a slight year-on-year decline of 0.11%; net profit attributable to the parent after deducting non-recurring items was a loss of 224 million yuan, down 1994.34% year on year. Profit pressure was mainly affected by high and volatile aluminum prices, reduced shipments due to customer model transitions, and foreign exchange gains and losses shifting from a gain of 19.54 million yuan last year to a loss of 22.77 million yuan in the current period. Operating costs in the reporting period were 2.607 billion yuan, and the comprehensive gross margin fell to 6.87%. Although the company operates a production-to-sales model, the pass-through of aluminum raw material cost adjustments to customers has a lag. Net cash outflow from operating activities in the reporting period was 177 million yuan, compared with a net inflow of 38.73 million yuan in the same period last year, a year-on-year change of negative 557.43%. The company said that in the second half of the year it will promote the pass-through of aluminum material costs, implement overseas orders, optimize overseas plant operations, improve capacity utilization, and strive to improve operating performance.

Wencan Shares disclosed its earnings forecast, expecting a net loss attributable to the parent company of 180 million to 240 million yuan in the first half of 2026, compared with a profit of 13.11 million yuan in the same period last year. The company expects operating revenue for the period to be approximately 2.798 billion yuan, a slight year-on-year decline of 0.16 percent. The swing from profit to loss was mainly due to high aluminum prices in the first half, which significantly increased raw material costs, and there was a time lag in price adjustments and compensation for some products. At the same time, some downstream customers underwent model generation switches and orders for traditional fuel vehicles declined, leaving gross margins for related products at low levels. In addition, the company incurred exchange losses in the current period, compared with exchange gains in the same period last year. The company stated that it will introduce a number of measures to improve performance going forward.