Shandong Weigao Group Medical Polymer Company (1066) H1 2026 earnings summary

Executive summary

• Revenue for H1 2026 rose 3.1% year-over-year to RMB6,849m, with overseas revenue up 6.2% and contributing 25.2% of total sales.

• Net profit attributable to owners dropped 23.2% to RMB774m, mainly due to margin pressure, non-recurring items, and foreign exchange losses; excluding extraordinary items, net profit was RMB890m, down 11.7% YoY but up 45.3% HoH.

• Gross profit margin declined to 46.3% from 49.7% last year, primarily due to policy-driven price reductions in core product lines.

• R&D expenses accounted for 4.4% of revenue, with 129 new product registrations in China, 150 new patents, and 59 new overseas product certificates in orthopaedics.

• Strategic M&A activities advanced, including the Weigao Blood Purification transaction approved by the Shanghai Stock Exchange, pending CSRC registration.

Financial highlights

• Total revenue: RMB6,849m in H1 2026, up from RMB6,644m in H1 2025.

• Gross profit was RMB3,170.66m, down 4.0% YoY; net exchange loss increased to RMB91.38m from RMB41.34m last year.

• Net cash inflow from operating activities was RMB1,077.69m; cash and bank balances stood at RMB7,719.70m as of June 30, 2026.

• Gearing ratio improved to 16.7% from 21.2% at year-end 2025.

• Dividend payout ratio maintained at 50% for H1 2026, with interim dividend of RMB0.0854 per share proposed, pending shareholder approval.

Outlook and guidance

• Domestic healthcare demand is recovering slowly, with persistent price pressure and cautious procurement.

• Overseas revenue growth outpaced domestic, but compliance and operational costs rose due to global volatility and exchange losses.

• Focus on increasing new product share, optimizing product mix, and maintaining stable gross margin.

• Continued expense management and commercial profit margin improvement targeted.

• M&A integration and overseas expansion, including trial production in Indonesia and market entry in Côte d'Ivoire, are key priorities.