Luxking 1H FY2026 net profit jumps 54% to RMB5.1m on margin expansion despite 6% revenue decline
Summary:
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Revenue fell 5.5% year on year to RMB288.0m as BOPP films sales dropped 19.9% and general tapes eased 2.7%, partly offset by a 5.2% increase in higher‑value industrial specialty tapes.
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Gross profit rose 13.5% to RMB49.1m, lifting gross margin from 14.2% to 17.1% on better mix (more IS tapes and bespoke products), improved capacity utilisation and efficiency, and slightly lower raw‑material costs.
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Net profit surged 53.5% to RMB5.1m (EPS RMB0.4008 vs RMB0.2610), helped by higher government subsidies and lower finance costs, despite a near 20% rise in administrative expenses from wage inflation and 30th‑anniversary brand spending.
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Operating cash flow remained healthy at RMB16.3m; capex of about RMB13.0m went into expanding the Hubei plant and upgrading Zhongshan factory lines, while bank borrowings fell to RMB116.9m and cash stood at RMB25.0m.
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NAV per share increased to RMB11.54 from RMB11.15, but no interim dividend was declared as the Group preserves cash amid weak China and export demand, intense BOPP competition and cost pressures, while prioritising IS tape growth and further efficiency gains.