Huada Automotive Tech Corp Ltd

Huada Technology released its 2026 interim report, showing the company swung from profit to loss, with net profit attributable to the parent company at negative 83.17 million yuan, a decrease of 282 million yuan from the same period last year, down 141.81 percent year on year. Total operating revenue was 2.65 billion yuan, down 7.59 percent year on year. Net cash flow from operating activities was negative 486 million yuan, down 1,212.50 percent year on year. The company's asset-liability ratio was 52.88 percent, gross margin was 12.93 percent, return on equity was negative 2.43 percent, and diluted earnings per share was negative 0.18 yuan.

Huada Technology has responded to the Shanghai Stock Exchange's inquiry regarding quarterly fluctuations in fund items in its 2025 annual report. The company's prepayments reached 80.6779 million yuan at the end of the first quarter of 2025 and rose to 97.6539 million yuan at the end of the first quarter of 2026, but stood at only 31.2161 million yuan at year-end. Other non-current assets were 158 million yuan at the end of the third quarter, dropping to 29.7918 million yuan at year-end. Other receivables once reached 130 million yuan at the end of the third quarter, later corrected to 10.9549 million yuan, and were 9.1275 million yuan at year-end. Other payables were 223 million yuan at the end of the first quarter and 55.2943 million yuan at year-end, including a balance of 13.0018 million yuan with an individual named Deng Xiaolan. The company explained that the prepayment fluctuations stem from genuine business activities, including a 22 million yuan material preparation refund from GAC Baoshang due to a customer vehicle model discontinuation, and a 54.438 million yuan prepayment to Chizhou An'an to lock in aluminum prices, of which 47 million yuan was later refunded by the supplier. The high level of other non-current assets was due to equipment not yet delivered, which was transferred to construction in progress in the fourth quarter. The inflated other receivables resulted from a duplicate reclassification of negative internal transaction balances. The 13 million yuan under Deng Xiaolan's name is a working capital loan for its subsidiary Yuntu Electronics. The 16.1764 million yuan owed by Haining Yihua has been fully provisioned for bad debts. The two companies share the same registered address only because they lease factory premises for supporting production, and there is no related-party relationship.

Huada Technology issued a correction announcement, stating that due to an error in offsetting other receivables and other payables, both items were inflated by 119 million yuan in the 2025 third-quarter report. The erroneous amount accounted for 1.69 percent of the company's total assets at the end of September 2025. After correction, total assets were revised down from 7.172 billion yuan to 7.053 billion yuan, other receivables plunged from 130 million yuan to 10.9549 million yuan, and other payables were reduced from 183 million yuan to 64.2351 million yuan. The company expressed deep apologies for the inconvenience caused to investors and pledged to strengthen the preparation and review of periodic reports. Additionally, the company expects a net loss attributable to shareholders of between 63 million yuan and 126 million yuan for the first half of 2026, compared with a profit of 199 million yuan in the same period last year, mainly due to a decline in the fair value of equity investments, production ramp-up in the die-casting business, and a drop in gross margins for fuel vehicle components.

Huada Technology issued a performance forecast, expecting a net loss attributable to the parent company of 63 million to 126 million yuan for the first half of 2026, swinging from profit to loss year-on-year. After deducting non-recurring items, the net loss attributable to the parent company is 3.5 million to 7 million yuan. The company said the expected loss is mainly due to a significant decline in the fair value of equity investments held, high fixed costs from the die-casting business being in the production ramp-up stage, rising material prices dragging on profitability, and a decline in gross profit from the fuel vehicle components business.