What happened
Xianfeng Jingke (688605) reported H1 2026 operating revenue of 663 million yuan, a year-on-year increase of 1.25%, according to its semi-annual report released on August 30.
Net profit attributable to shareholders was 55.0379 million yuan, down 48.17% year-on-year. The company attributed the decline to factors including depreciation from newly activated production facilities, higher payroll costs as headcount rose from 1,471 to 1,823, increased quality-control spending, ongoing capacity ramp-up, higher inventory write-downs, and large exchange losses.
Why it matters
The sharp divergence between modest revenue growth and a steep profit decline suggests Xianfeng Jingke is in a heavy investment phase, where expansion costs are currently outpacing earnings. The company itself acknowledges that revenue and profit release depends on capacity expansion, employee skill development, and training, implying near-term margins may stay under pressure.
At the same time, orders in hand at the end of the reporting period grew more than 80% year-on-year to a record high, indicating demand is strong. The key question is whether the company can convert this backlog into profits as new capacity matures and efficiency improves.
Key facts
H1 2026 revenue was 663 million yuan, up 1.25% year-on-year.
Net profit attributable to shareholders fell 48.17% to 55.0379 million yuan.
Employee numbers rose from 1,471 in the year-earlier period to 1,823 in the current period.
Orders in hand at the period end rose more than 80% year-on-year, hitting a record high.
Profit decline was also linked to depreciation, quality-control costs, inventory write-downs, and exchange losses.
What to watch next
Whether the company can accelerate the release of its record order backlog into revenue as newly added capacity becomes fully operational.
How quickly new employees reach required skill levels and whether the higher cost base from cleanroom investment and quality measures will ease in subsequent quarters.
The size and trend of exchange losses, which could continue to affect profitability if currency movements remain unfavorable.