HONGHUA GROUP (00196) has unveiled its interim results for the 2026 fiscal first half, posting a turnover of approximately RMB 2.51 billion, a year-on-year contraction of 3.5%. The company recorded a loss attributable to shareholders of RMB 28.92 million, marking a sharp reversal from the prior-year profit, with a loss per share of RMB 0.32 cents.

The earnings decline is attributed to three primary factors outlined in the company's announcement. Firstly, the military conflicts involving the US, Israel, and Iran have directly disrupted the group's Middle East operations, causing a temporary halt in certain drilling engineering services. This geopolitical tension has also dealt a significant blow to the land drilling rig business, which accounts for nearly half of total revenue, leading to project payment delays and increased supply chain costs. Secondly, heightened volatility in the US dollar exchange rate, coupled with the high proportion of USD-denominated settlements in overseas projects, generated substantial exchange losses during the reporting period. Thirdly, the fracturing business experienced a substantial revenue drop year-on-year, impacted by cyclical adjustments in the domestic market.