China XLX Fertiliser reported 1H 2026 revenue of RMB 15.74 billion, up 24% year on year, driven by expanded production capacity and higher selling prices across key products. Net profit jumped 62% to RMB 1.23 billion, while profit attributable to shareholders rose 54% to RMB 920 million.

Gross profit climbed 49% to RMB 3.03 billion, with the gross margin improving to 19% from 16% a year earlier. Urea remained the main contributor: sales volume increased 21% to 2.34 million tonnes and gross profit advanced 66%, aided by a 6% reduction in unit costs after new capacity at the Jiujiang Phase II project came onstream. High-efficiency fertilisers accounted for an additional four-percentage-point share of fertiliser sales, reinforcing the product-mix upgrade.

Chemical products added momentum. Liquid ammonia volumes more than tripled, lifting segment gross profit despite a 3% margin erosion; methanol margin slipped one percentage point due to a higher share of trading volumes; melamine margin expanded seven percentage points to 38% as exports to the EU and Russia rose; DMF margin rose nine points to 27% on stronger prices and process upgrades; polyformaldehyde margin improved eight points to 20% owing to lower methanol feedstock costs.

Operating expenses rose 27% to RMB 1.69 billion as the Group invested in R&D, marketing transformation and project ramp-ups, yet the expense ratio held at 10.7%. Finance costs increased 22% to RMB 280 million following a RMB 4.37 billion rise in borrowings, though the average loan rate fell 0.3 percentage points thanks to low-cost, long-tenor financing from state banks.

The gearing ratio stood at 67.8% at 30 June 2026, up 1.8 percentage points versus year-end 2025, reflecting ongoing project construction. The Group retained unused bank credit lines of RMB 18.50 billion and cash and equivalents of RMB 2.79 billion.

Management expects the fertiliser market to soften in 2H 2026 but sees cost advantages and product differentiation underpinning margins. The Xinxiang new-materials urea plant and Zhundong integrated project are slated for start-up in Q3 and Q4 2026 respectively; the Guangxi flagship complex targets commissioning in Q3 2027. Capital expenditures for 1H 2026 totalled RMB 3.10 billion, funded by operating cash flow and bank facilities.

No interim dividend was declared. The company continued share buy-backs, repurchasing 4.39 million shares for HK$ 42.53 million during the period, leaving 8.56 million treasury shares for employee incentive schemes and other corporate uses.