In terms of industrial layout, China's Xuyang Group (01907), which initially forms the three pillar industries of chemicals, coke, and new energy, went hand in hand. Its newly disclosed 2026 interim results showed the capital market that after experiencing a dormant period in the previous industry, the company finally ushered in a comprehensive restoration of financial indicators and the accelerated release of growth potential.
According to the company's interim report, in the first half of this year, Xuyang Group's revenue increased 5.2% year on year to 21.856 billion yuan, net profit surged 376% year on year to 244 million yuan, and basic profit per share reached 4.77 points, soaring 736.8% year on year. The overall recovery in core financial data indicates that this global independent coking leader is gradually emerging from the industry adjustment cycle and starting a new round of high-quality growth. It is worth mentioning that as soon as fundamentals picked up, Xuyang Group increased its dividend efforts. The company's board of directors declared an interim dividend of 1.44 points per share to give back to shareholders with real money.
Crossing the inflection point and relaunching a new round of high-quality growth
In the more than 30 years of development of the Xuyang Group, 2026 is bound to be an extraordinary year. In the first half of this year, Xuyang Group completed an agreement to transfer 14.5% of Binhai Energy's shares, and the latter's controlling shareholder became Xuyang Group. It should be pointed out that this change is an optimization of the equity structure within the same actual controller system, and the actual controller remains the same. At this point, Xuyang Group's “integrated development of Hong Kong stocks and A-shares focus on new energy” dual listing platform collaboration strategy has officially been implemented, and the Group's industrial layout has also expanded from the two pillars of chemicals and coke to a new pattern where the three major growth poles of chemicals, coke, and new energy sources go hand in hand. It was also in this year that Xuyang Group, which had been dormant at the bottom of the industry cycle, announced to the market the arrival of an inflection point in its performance with an interim report card of both revenue and net profit growth.
On an item-by-case basis, in the chemical sector, revenue from the fine chemical product production business increased 4.2% year-on-year to 9.475 billion yuan during the reporting period. Gross profit jumped sharply from 655 million yuan in the same period last year to 926 million yuan, an increase of 41.4%, and gross margin increased from 7.2% to 9.8%. The core variable driving this growth was a significant rebound in the prices of the company's main chemical products. In the context of the industry's “reversal” of the industry, industries such as caprolactam and hydrobenzene actively cut production and prices, and the supply and demand pattern is improving. The average price of caprolactam rose 13.3% year over year to 9,701 yuan/ton; in addition, rising prices of upstream raw materials such as pure benzene and cyclohexanone formed rigid cost support, which jointly promoted the recovery of chemical product prices. At the same time, driven by reduced methanol supply and increased demand, methanol prices have risen steadily. Relying on the stable supply of raw materials and the rigid cost advantages brought by the coke oven gas to methanol production process, the alcohol ammonia production line is quite profitable.
In terms of the coke business, revenue from the coke and coking products production business increased 9.6% year on year to 6.966 billion yuan, gross profit increased 10.5% year on year to 953 million yuan, and gross margin stabilized at 13.7%. During the reporting period, the average price of coke rose 11.3% year on year to about 1,515 yuan/ton. The company maintained the coal coke price difference above 300 yuan/ton through precise coal blending management and cost control. Against the backdrop of overall overcapacity in the coke industry, Xuyang has achieved steady countercyclical performance with the scale effect of the world's largest independent coke producer and the integrated advantages of sales, transportation, production, supply, and research accumulated over 31 years. Xuyang Group's overseas market business also performed well during the period. Thanks to favorable factors such as the increase in global production capacity for new and resumed production of blast furnaces and India's quota cancellation policy, the revenue, net profit and sales volume of Xuyang's Xuyang Weishan in Indonesia increased 976%, 1,854%, and 61%, respectively, year-on-year in the first half of the year.
The new energy sector showed strong growth momentum. During the period, revenue from the NEV product production business surged 122.9% year on year to $523 million, gross profit improved sharply from loss of 12.95 million yuan in the same period last year to profit of 58.26 million yuan, and gross margin jumped from -5.5% to 11.1%. Increased shipments of anode materials and expansion of graphitization production capacity are the main driving forces; the first phase of the country's only 580MW source network load storage project, 150MW, was officially put into trial operation, further consolidating the cost competitiveness of Xuyang Group's new energy business.
In addition to the three pillar industries, there was no shortage of highlights in Xuyang Group's operation management and trade business in the first half of the year. The operation management business benefited from the launch of new projects. Revenue increased 46.2% year on year to 1,863 billion yuan, and gross margin increased from 4.8% to 8.1%. Although revenue fluctuated during the period due to active reduction of low gross margin projects, gross profit increased 116.8% year on year, and business structure optimization results were remarkable.
During the reporting period, Xuyang Group's overall gross profit reached 2,311 billion yuan. The corresponding gross margin increased to 10.6% from 8.1% in the same period last year, and the net margin increased from 0.2% to 1.1%. The simultaneous restoration of profit indicators in all dimensions further confirms that Xuyang Group has achieved high-quality growth in the true sense of the word during the inflection point of the industry cycle.
The three pillars of business collaborate to construct a deterministic growth pattern
After crossing the inflection point in performance, it is expected that Xuyang Group's growth momentum will continue to be unleashed at an accelerated pace with the synergy of the three pillar industries of chemicals, coke, and new energy.
As the largest sector in the current business layout of the Xuyang Group, the chemical business showed a steady recovery trend in the first half of the year. From an industry perspective, the collective recovery in chemical product prices in the first half of the year is no accident; most products have a foundation for continued recovery. Currently, “anti-internal circulation” has become a consensus action in the chemical industry. Companies in the caprolactam, hydrobenzene and other industries are taking the lead in cutting production and prices. It is expected that the next stage will spread to more chemical products, and the pattern of improving supply and demand in the entire industry will continue to be interpreted in depth. Looking at Xuyang Group itself, the company continues to expand along the existing industrial chain to high added value links. Previously, 50,000 tons/year hexanediamine products independently developed and innovated by Xuyang Group had already been put into operation. Currently, full production and sales have been achieved, and the quality has been widely recognized by downstream customers. What can be expected is that as the chemical sector moves from the bottom of the cycle to the release of performance and the incremental contribution of high-value-added fine chemical products, Xuyang's collective chemical business will continue to unleash a strong momentum of performance growth.
As the basic market of the Xuyang Group for a long time, the coke sector has shown steadiness through the cycle. Judging from recent market performance, coke showed a rapid upward trend. The first and second rounds of increases have been implemented one after another, and the third round of increases has already begun. Tracing the supply and demand relationship behind it, supply-side coking companies actively cut production due to deep losses, and both capacity utilization and average daily output declined, and supply continued to shrink; while demand-side steel mill iron and water production declined slightly month-on-month but remained high overall. Rigid demand for coke was still supported, and the decline in steel mill inventories further confirmed the pattern of tight supply and demand. In the medium to long term, although the coke industry still has excess capacity, in the context where the industry continues to “reverse internal circulation,” Xuyang is expected to use its leading position to further increase its market share and continue to transform its scale advantage into stronger bargaining power and cost control capabilities.
The new energy sector is an exciting new growth pole for the Xuyang Group. Relying on the Ulanqab industrial base, Binhai Energy, a core subsidiary of Xuyang Group, has now built more than 100,000 tons of artificial graphite anode production capacity; 200,000 tons of integration is expected to be fully completed and put into operation by the end of this year, and the annual shipment is expected to reach 130,000 tons; the 580,000 kilowatt grid load storage green power project will be put into operation in batches during the year, covering more than 50% of green electricity. It is a scarce supporting model for the industry, which can not only greatly reduce production costs, but also meet export carbon accounting requirements. In addition, Binhai Energy has also laid out new anode materials for silicon carbon and porous carbon, and has a complete matrix of all types of lithium battery materials. Relying on the cost and supply chain advantages of “green electricity+materials”, combined with the rapid launch of new production capacity, Xuyang Group's third growth curve is expected to accelerate and contribute more to performance growth.
In terms of hydrogen energy business, the first domestic commercial 5-ton/day hydrogen expansion refrigeration hydrogen liquefaction project in Dingzhou Park was completed and put into operation in May. This is the first domestic demonstration project for the entire domestic “production, storage, transportation and application” industry chain, filling the gap in the domestic civilian liquid hydrogen industry. In the future, Xuyang Group will continue to focus on the rapid development of the hydrogen energy industry in the Beijing-Tianjin-Hebei region, and spread the intelligent hydrogen supply chain to the whole country with advanced technology and more customer-oriented services.
Looking at the above, the logic of value revaluation for Xuyang Group, which has now crossed the inflection point, is already clear: in the short to medium term, the increase in chemical prices will continue to bring about performance flexibility, and the release of new production capacity in the new energy sector will also contribute to the company's significant performance growth; and looking at the longer term, the anti-cyclical development capabilities built by the collaborative development of the three major industries of chemicals, coke, and new energy will continue to expand Xuyang Group's growth visibility and sustainability.