USAS Building System (Shanghai) Co., Ltd. (USAS Building) reported a steep earnings contraction for the six months ended 30 June 2026, as weaker demand from a core customer and project delays sharply reduced revenue.

Revenue dropped 68.3% year-on-year to RMB 451.75 million (USD 62.3 million). The mainstay prefabricated steel (PS) building subcontracting segment fell 74.6% to RMB 317.03 million after a strong 2025 base and slower order intake in early 2026. General contracting revenue slipped 33.3% to RMB 94.40 million, while industrial environmental equipment sales rose 14.3% to RMB 40.32 million, supported by higher demand for machinery filtering and acoustic systems (MFAS).

Despite the revenue slide, gross margin improved to 13.6% from 10.2%, benefiting from a higher share of the environmental equipment business, fewer low-bid PS projects and stabilising raw-material costs. Gross profit nevertheless halved to RMB 61.56 million.

Operating costs moved mixed: administrative expenses increased 9.1% to RMB 36.03 million on overseas expansion spending, research and development outlays eased 15.6% to RMB 7.85 million, and finance costs edged up 8.3% to RMB 5.62 million due to higher average borrowings.

Net profit attributable to shareholders tumbled 84.2% to RMB 1.50 million, with total group profit at RMB 9.87 million. The board declared no interim dividend.

Working-capital pressure intensified. Operating cash outflow reached RMB 227.21 million, reversing a RMB 21.05 million inflow a year earlier. Cash and equivalents stood at RMB 254.21 million, down from RMB 419.50 million at end-2025. Bank borrowings expanded to RMB 565.56 million, lifting the gearing ratio to 97.5% from 62.0%. Contract assets fell 20.8% to RMB 586.71 million, while contract liabilities climbed 45.7% to RMB 66.42 million on higher customer advances.

Capital expenditure totaled RMB 13.90 million, mainly for facility upgrades in Shanghai, Suzhou and the startup plant in Thailand. USAS Building also divested a 43% stake in MEGA Construction (Jiangsu) for RMB 33.86 million, reducing its holding to 8% and deconsolidating the unit.

Looking ahead, management reiterated its “dual-wheel” strategy centred on expanding core PS building capacity and accelerating Southeast Asian growth via new manufacturing sites. The company will also advance its “Green Building+” initiative, promoting building-integrated photovoltaics and industrial environmental equipment, and deepen digitalisation through an Industrial Internet of Things platform.