Chu Kong Petroleum and Natural Gas Steel Pipe Holdings Limited (Chu Kong Pipe, 01938) released its unaudited results for the six months ended 30 June 2026, showing a sharp revenue contraction but a return to profitability on the back of a significant tax credit.
Revenue and Earnings • Revenue fell 56.0% year on year to RMB 611.66 million, down from RMB 1.39 billion in 1H25, mainly due to delayed steel-pipe deliveries amid heightened geopolitical tensions in the Middle East. • Profit attributable to shareholders reached RMB 44.16 million, reversing the RMB 20.94 million pre-tax loss and contrasting with RMB 171.75 million profit a year earlier. • Earnings per share dropped to RMB 0.04 from RMB 0.17. • The turnaround in bottom-line performance was driven by a RMB 65.09 million income-tax credit tied to the reversal of prior-year over-provisions.
Segment Performance • Steel pipe operations remained the core revenue source, contributing RMB 611.18 million (100.0% of group revenue), versus RMB 1.26 billion in 1H25. Domestic sales accounted for 72.0% of segment turnover, up from 23.1% a year earlier. • Property development and investment generated only RMB 0.48 million in rental income; no property sales were booked, compared with RMB 126.71 million in segment revenue in 1H25. • Steel-pipe gross profit contracted 47.4% to RMB 124.08 million, yet segment margin improved to 20.3% (1H25: 18.7%) on a more favourable sales mix. No gross profit was recorded from property sales.
Cost and Expense Dynamics • Other income and gains dropped to RMB 22.67 million (1H25: RMB 135.76 million) as last year’s period included a RMB 78.67 million gain on subsidiary disposal and RMB 20.21 million of other one-off items. • Selling and distribution expenses declined 25.3% to RMB 16.19 million, while administrative expenses fell 28.1% to RMB 100.19 million, aided by lower R&D spending. • Finance costs decreased 32.2% to RMB 37.00 million in line with a lower average borrowing rate. • Other expenses more than doubled to RMB 13.16 million, mainly due to higher compensation charges. • A RMB 1.62 million foreign-exchange loss replaced a RMB 5.59 million gain in 1H25, reflecting RMB appreciation against the US dollar.
Balance Sheet and Liquidity • Cash and cash equivalents stood at RMB 58.04 million (31 December 2025: RMB 21.45 million). • Net current liabilities widened to RMB 448.25 million, with the current ratio at 0.89 (31 December 2025: 0.92). • Total interest-bearing borrowings rose to RMB 1.78 billion from RMB 1.71 billion; 76% matures within one year. • The gearing ratio (interest-bearing debt to total assets) was 28.9% (31 December 2025: 29.0%). • Undrawn bank facilities totalled RMB 1.37 billion. • Pledged assets comprised RMB 630.08 million of property, plant and equipment, RMB 445.55 million of leasehold land, and RMB 840.92 million of completed properties held for sale.
Capital Allocation • No interim dividend was declared for 1H26, unchanged from the prior-year period.
Management Outlook Management anticipates a challenging operating environment in 2026 due to ongoing geopolitical risks and trade barriers. Nonetheless, long-term demand for oil and natural gas pipelines, deep-sea energy development, and emerging hydrogen and CCUS infrastructure is expected to provide growth opportunities. Chu Kong Pipe plans to leverage its certifications and experience in welded steel pipes to capture domestic and international projects across energy, infrastructure and low-carbon sectors.