Jiangxi Hungpai New Material Co Ltd

Hongbai New Materials released its 2026 interim report. The company's total operating revenue was 847 million yuan, and net profit attributable to the parent company was a loss of 30.4855 million yuan, a decrease of 3.88 million yuan compared with the same period last year, with the loss widening year on year. Net cash flow from operating activities was a negative 27.1098 million yuan. The company's asset-liability ratio was 29.80 percent, up 2.17 percentage points from the previous quarter. Gross margin was 6.45 percent, down 1.41 percentage points from the same period last year. Return on equity was negative 1.14 percent. Diluted earnings per share was negative 0.04 yuan. The number of shareholders was 38,600, and the top ten shareholders held 48.48 percent of the total share capital.

Hongbai New Materials released its 2026 interim report on August 30. During the reporting period, the company achieved operating revenue of 847 million yuan, up 15.85% year on year, but net profit attributable to the parent company was negative 30 million yuan, with the loss widening year on year, continuing a trend of rising revenue without rising profit. The company focuses on functional silanes and nano-silicon materials. Affected by low product prices and exchange losses, the profitability of its main business has not yet recovered. Net profit after deducting non-recurring items was negative 43 million yuan, and net cash outflow from operating activities was 27 million yuan. The company is optimizing its product structure, transitioning toward high-purity electronic-grade silicon-based materials, and accelerating construction of its Thailand base, but raw material price fluctuations and changes in the trade environment remain the main risks.

Hongbo New Materials disclosed its earnings forecast, expecting a net loss attributable to the parent company of 22 million to 33 million yuan in the first half of 2026, compared to a loss of 26.6055 million yuan in the same period last year. The net loss after deducting non-recurring items is expected to be 30 million to 47 million yuan, compared to a loss of 32.5963 million yuan in the same period last year. The company stated that the main reasons for the loss are the weak macroeconomic environment and intense industry competition. Although product prices saw a slight increase in the second quarter, they remain at low levels, having limited impact on performance. Meanwhile, exchange rate fluctuations led to increased exchange losses, compared to an exchange gain of 2.73 million yuan in the same period last year. Hongbo New Materials is primarily engaged in the research, development, production, and sales of silicon-based new materials such as functional silanes and nano-silicon materials.

Hongbai New Materials, the world's top supplier of sulfur-containing silanes by market share, is enduring a harsh operating winter. It posted a net loss attributable to shareholders of 146 million yuan in 2025, followed by a further loss of 28.02 million yuan in the first quarter of 2026. Yet its share price briefly touched 14.9 yuan at the end of June, a three-year high, giving it a total market value of 8 billion yuan and a trailing price-to-earnings ratio of negative 47 times, a sharp deviation from the chemical raw materials sector average of around 25.2 times. The company's gross margin has slid from 33.89 percent in 2022 to just 2.21 percent in the first quarter of 2026. Its core silane coupling agent business has seen revenue shrink under the weight of an industry price war, while total costs rose 1.47 percent year on year. Depreciation, labour, and financial expenses stemming from capacity expansion have become rigid outlays. At the industry level, China's functional silane market is plagued by low-end overcapacity. Peers such as Chenguang New Materials, Yanggu Huatai, Sanfu Shares, and Jianghan New Materials continue to expand production, while downstream tyre demand growth is slowing. The resulting supply-demand imbalance has eroded pricing power. The high-end electronic-grade silane project that the company is pinning its hopes on has yet to break ground, and its Thailand production base faces multiple pressures, making it difficult to offset losses in the traditional business in the near term. During the period of losses, the actual controller's concert parties, financial investors, and senior executives have been selling down their holdings intensively. Controlling shareholder Hongbai Chemical reduced its stake by 19.5 million shares, and Xinyu Baolong has announced a clearance-style divestment plan. The concentrated cashing out by insiders is fuelling market concerns that the industry's downcycle will be prolonged.