Zhongxin Fruit & Juice 1H FY2026 profit slips 38% to RMB13.5m on 44% revenue drop; margins improve to 19.2%
Summary:
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1H FY2026 revenue fell 43.7% to RMB94.7m as sales volume of fruit juice concentrates and fructose declined after heavy customer stocking in the prior year, but gross margin improved to 19.2% from 16.3% on production upgrades and cost optimisation.
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Net profit dropped 37.8% to RMB13.5m (EPS 1.28 RMB cents versus 2.06 RMB cents), with profit before tax down 33.4% to RMB14.7m, partly cushioned by a 50.5% rise in other operating income to RMB3.2m, mainly higher interest charged on receivables from immediate holding company SDICZL.
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Operating cash flow swung to a RMB33.9m outflow from a RMB97.6m outflow, largely due to higher inventories (RMB98.0m vs RMB36.1m) and larger notes receivables (RMB86.0m vs RMB70.0m) as more sales were settled via SDICZL promissory notes; cash fell to RMB2.8m, funded by RMB26.1m net financing inflow including RMB56.1m new borrowings.
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Trade receivables of RMB105.5m remained highly concentrated, with about 99% due from immediate holding company SDICZL, while secured trade financing of RMB85.3m is backed by endorsed SDICZL notes; net asset value per share rose to 17.08 RMB cents from 15.80 RMB cents as at 30 June 2025.
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Management highlights a cyclical industry backdrop, maintaining production to keep adequate inventory despite weaker demand, and notes ongoing discussions with PRC authorities on compensation and relocation for Xuzhou Zhongxin’s land and buildings, with no impairment taken yet on affected PPE of about RMB16.4m.