Hongxing Coldchain (HX COLDCHAIN) released its 2026 interim results, revealing a sharp earnings decline as downstream customers curtailed inventory levels, but bolstered liquidity following its January Hong Kong listing.
Revenue and Profitability • First-half revenue slipped 6.1% year on year to RMB110.80 million, weighed down by a 7.8% fall in core frozen-food storage income to RMB74.84 million and a 34.5% slide in leasing services to RMB15.58 million. • Gross profit plunged 48.2% to RMB32.57 million, with margin contracting to 29.4% from 53.3% a year earlier as the group absorbed higher logistics subsidies for customers. • Profit for the period dropped 75.7% to RMB9.64 million; earnings per share fell to RMB0.10 from RMB0.53. • Cost of sales surged 41.8% to RMB78.23 million, reflecting increased customer support and the launch of a new frozen-food trading business that contributed RMB8.33 million revenue but added RMB8.08 million in cost of inventories.
Balance Sheet and Liquidity • Total assets rose to RMB1.43 billion (31 December 2025: RMB1.22 billion) after the HK$254.5 million initial public offering. Cash and cash equivalents quadrupled to RMB354.29 million. • Interest-bearing bank borrowings edged down 2.1% to RMB200.06 million; the gearing ratio improved to 33.3% from 42.2%. • Trade receivables grew 76.7% to RMB27.00 million, mainly due to extended credit terms and new product sales. Inventory reached RMB10.45 million versus RMB0.37 million at year-end, mirroring the ramp-up of the trading segment.
Cash Flow and Capital Allocation • Operating cash inflow stood at RMB64.00 million, down from RMB75.55 million a year earlier. • Net investing cash flow returned to positive RMB2.75 million after redeeming short-term wealth-management products. • The company deployed HK$24.90 million (c.10% of IPO proceeds) mainly for working capital; HK$229.60 million remains earmarked for expansion of processing facilities, IT upgrades and potential acquisitions.
Operational Developments • HX COLDCHAIN broadened value-added services, including in-province and inter-provincial logistics routes, standardized labour services and packaging procurement support. • Construction of a food processing and distribution centre has commenced, aimed at extending the cold-chain value proposition. • Automation advances from the Phase V warehouse project and continued digitalisation underpin capacity planning and operational efficiency.
Outlook Management plans to: 1) Build a new processing plant and expand storage capacity by 8.7% by 2028-29; 2) Invest in AI-enabled warehousing and logistics technologies; 3) Pursue two to three acquisitions (enterprise value RMB100–200 million each) over the next four years; 4) Broaden regional logistics partnerships to extend market reach.
Dividend The Board proposed no interim dividend for the period.
Subsequent Events Post-period, HX COLDCHAIN placed short-term principal-protected wealth-management deposits with Bank of Communications totaling RMB70 million between July and September 2026. All earlier subscriptions have been redeemed in full.