Hunan Fazhan Industrial Co Ltd

Hunan Development released its 2026 interim report. Total operating revenue was 534 million yuan, an increase of 127 million yuan from the same period last year, up 31.20% year on year. Net profit attributable to the parent company was 185 million yuan, an increase of 80.7649 million yuan from the same period last year, up 77.45% year on year, marking a third consecutive year of growth. Net cash flow from operating activities was 368 million yuan, up 62.94% year on year. The company's latest asset-liability ratio was 40.24%, gross margin was 64.82%, ranking first among peers, ROE was 4.88%, and diluted earnings per share was 0.32 yuan. The number of shareholders was 54,800, and the top ten shareholders held 63.87% of the total share capital.

Hunan Development released its 2026 interim report, achieving a leapfrog expansion in hydropower installed capacity through a major asset restructuring, with explosive growth in performance during the reporting period. The company achieved operating revenue of 534 million yuan, up 31.20% year on year; net profit attributable to the parent company was 185 million yuan, up 77.45% year on year; and non-GAAP net profit was 124 million yuan, up 202.86% year on year. Clean energy business revenue accounted for 92.65% of total revenue, with a gross margin of 69.92%, mainly thanks to the completion of the restructuring of four hydropower stations: Gaotan, Tongwan, Qingshuitang, and Xiaoxi. Total controllable installed capacity jumped from 245,000 kilowatts to 745,000 kilowatts, and abundant water inflows boosted power generation. The sand and gravel business came under pressure from market supply and demand, with revenue of only 32.61 million yuan. Looking ahead, the company needs to watch electricity price marketization fluctuations and water inflow risks. The 80-megawatt tea-light complementary project in Hengdong County has started pile foundation construction and is expected to become a new growth point.

As of now, 22 companies in the Shenzhen-listed utilities sector have disclosed earnings forecasts. More than half reported year-on-year profit growth, and 10 saw net profit rise by over 50%, with overall profitability improving markedly. Qianyuan Power expects first-half net profit attributable to the parent of 220 million to 255 million yuan, up 73.01% to 100.54% year on year, with power generation reaching 4.036 billion kilowatt-hours, a 26.10% increase. Chuanneng Power expects net profit attributable to the parent of 650 million to 720 million yuan, up 112.41% to 135.29%, mainly driven by the commissioning of lithium mining and lithium salt projects and the grid connection of wind power projects. Fuchun Environmental Protection expects net profit attributable to the parent of 298 million to 335 million yuan, up 60% to 80%, with higher product prices in the non-ferrous metal resource recycling business as the main driver. Lixin Energy expects net profit attributable to the parent of 60 million to 80 million yuan, up 570.26% to 793.68%, as the grid connection of a joint venture's outbound power transmission project from Xinjiang led to a sharp increase in investment income. Changyuan Electric Power expects net profit attributable to the parent of 149 million to 215 million yuan, up 57.14% to 126.74%, benefiting from lower standard coal unit prices and higher average electricity selling prices. Hunan Development expects net profit attributable to the parent to rise 318.91% to 391.77% year on year, following the completion of a major asset restructuring that brought four hydropower companies into the consolidated financial statements and significantly expanded hydropower installed capacity. Overall, in the first half of 2026, the Shenzhen-listed utilities sector achieved broad-based growth across sub-sectors such as power, new energy, and environmental protection. Many companies benefited from multiple tailwinds including project commissioning, abundant water inflows, lower fuel costs, and asset restructurings, delivering relatively rapid profit growth.

Hunan Development disclosed its earnings forecast, expecting attributable net profit of 172 million to 201 million yuan in the first half of 2026, compared with a profit of 104 million yuan in the same period last year. Deducted non-recurring net profit is expected to be 110 million to 140 million yuan, with basic earnings per share of 0.30 to 0.35 yuan. The profit growth is mainly due to the company's implementation of a major asset restructuring, with the equity of Gaodian Company, Tongdian Company, Qingdian Company, and Xiaodian Company all registered under the company's name, making them controlled subsidiaries, and the installed hydropower capacity has increased significantly compared with the same period last year. At the same time, during the reporting period, the upstream water inflow of the company's hydropower stations was abundant, and the power generation of the hydropower business segment increased significantly compared with the same period last year.