China Ship Special Gas's semi-annual report shows revenue up 83%, net profit attributable to parent doubled, tungsten hexafluoride income surged nearly 3 times | Financial Report Insights

China Ship Special Gas's semi-annual report shows revenue up 83%, net profit attributable to parent doubled, tungsten hexafluoride income surged nearly 3 times | Financial Report Insights

After the close on July 17, CSSC Special Gas delivered the first half-year report for 2026 on the STAR Market.

The financial report shows that the company achieved operating income of 1.904 billion yuan in the first half of the year, a year-on-year increase of 83.13%; net profit attributable to shareholders was 348 million yuan, a year-on-year increase of 95.63%; net profit attributable to shareholders excluding non-recurring gains and losses was 326 million yuan, a year-on-year increase of 117.08%. Profit growth significantly outpaced revenue growth, and profitability is improving.

Breaking it down by quarters, growth is accelerating: First quarter revenue was 701 million yuan, up 36% year-on-year; second quarter revenue was 1.203 billion yuan, soaring 129.49% year-on-year, up 71.49% quarter-on-quarter. Second quarter net profit attributable to shareholders was 247 million yuan, up 170.51% year-on-year, and up 143.38% quarter-on-quarter. Q2 single-quarter profit was almost 71% of the total profit for the first half of the year.

The company directly points to the top contributor — revenue from tungsten hexafluoride products grew nearly threefold year-on-year, with both volume and price increases as the core driving force behind the explosive performance. Meanwhile, the net cash flow from operating activities changed from +333 million yuan in the same period last year to -241 million yuan, a year-on-year decrease of 172.19%. Profits are accelerating, but cash is flowing out. This contrast warrants closer scrutiny.

Triple Resonance of Tungsten Hexafluoride's Volume and Price Growth

Tungsten hexafluoride is an advanced process CVD precursor and a high-value consumable in semiconductor manufacturing, featuring high technical, production line equipment, and safety compliance barriers. In the first half, revenue from tungsten hexafluoride products grew nearly threefold year-on-year, underpinned by the triple resonance of supply contraction, expanding demand, and company volume increase.

On the supply side, overseas supply of high-purity tungsten powder was restricted, with Japanese manufacturers halting production leading to a widening global supply gap. A mid-July research report from GF Securities noted that the expansion cycle is long, long-term contracts are weakening, and the tungsten hexafluoride price rise cycle will continue. On the demand side, demand for AI advanced processes and high-stacked memory (HBM, 3D NAND) keeps expanding, and the global tungsten hexafluoride market is in a tight balance.

On the company side, CSSC Special Gas leverages its complete upstream self-supply of raw materials to achieve both volume and price increases during the supply shortage window. By the end of the reporting period, the company had an annual capacity of 2,000 tons of tungsten hexafluoride, making it the world’s largest ultra-high purity tungsten hexafluoride production base. Taking advantage of this window, the company achieved full coverage through new production lines of tungsten hexafluoride in domestic markets, and received opportunities for product sample testing and full-process validation from leading overseas customers. The signing of long-term contracts is progressing in an orderly manner. Among international mainstream memory and logic chip customers such as Micron, Kioxia, Intel, SK Hynix, the product’s market share is steadily rising.

China Post Securities stated that, as a major supplier of key electronic special gases (tungsten hexafluoride) for advanced semiconductor processes and 3D storage manufacturing, CSSC Special Gas is expected to fully benefit from this round of sector supply contraction and price increases.

Why Did Q2 Growth Suddenly Spike to 129%?

First quarter revenue grew 36% year-on-year, and the second quarter jumped directly to 129.49% — such an acceleration curve is rare in financial reports, suggesting that the tungsten hexafluoride price hike cycle concentrated in the second quarter. In terms of absolute values, Q1 revenue was 701 million yuan and net profit attributable to shareholders was 101 million yuan (up only 16.86% year-on-year), Q2 revenue was 1.203 billion yuan and net profit attributable to shareholders was 247 million yuan (up 170.51% year-on-year).

Q1 profit growth (16.86%) was much lower than revenue growth (36%), indicating product price transmission was not fully realized and gross margin was under pressure. By Q2, the volume and price increase effects of tungsten hexafluoride were released, with profit growth (170.51%) substantially exceeding revenue growth (129.49%), and gross margin improved significantly. This switch from "revenue up but little profit" to "revenue up and even higher profit" is direct evidence of the materialization of the price rise cycle for tungsten hexafluoride.

From the half-year report overall, total profit grew 99.79% year-on-year, almost doubled, in line with the growth of net profit excluding non-recurring items (+117.08%), indicating minimal interference from non-recurring gains and losses. Weighted average ROE rose from 3.15% to 5.86%, up 2.71 percentage points. Basic earnings per share rose from 0.34 yuan to 0.66 yuan, an increase of 94.12%.

However, R&D investment as a percentage of operating income fell from 5.33% to 3.55%, down 1.78 percentage points. Against an enlarged revenue base, this decline needs to be verified from the full half-year report to see if the absolute value of R&D spending grew in sync.

The Truth Behind Negative Cash Flow

This is the biggest gap versus expectations in this financial report. Operating cash flow net value was +333 million yuan in the same period last year, but -241 million yuan in the first half of this year, a complete reversal. The company gave a clear explanation: During the reporting period, stocking up along with rising prices of raw materials for key products like tungsten hexafluoride led to higher cash payments for procurement, while accounts receivable increased over the accounting period. In other words, cash outflow mainly comes from inventory and sales on credit, not operating losses.

The balance sheet corroborates this explanation. Accounts receivable increased from 502 million yuan to 950 million yuan, up 89.29%; inventory increased from 337 million yuan to 657 million yuan, up 95.00% — both roughly in line with revenue growth (83%), indicating natural growth from scale expansion. Furthermore, short-term borrowings went from zero to 600 million yuan, long-term borrowings from 400 million yuan to 600 million yuan, the company is actively leveraging to supplement liquidity. However, monetary funds are still at 2.583 billion yuan, so there is no pressure on short-term solvency.

Notably, total assets rose from 7.242 billion yuan at the end of last year to 7.646 billion yuan, up only 5.58%, while revenue growth reached 83%. This means asset turnover has significantly improved — the company used roughly the same scale of assets to leverage almost double the revenue. However, if negative cash flow persists, the sustainability of high turnover needs to be monitored.

Product Matrix and Industry Position

Besides tungsten hexafluoride, the company's other products are also growing. Nitrogen trifluoride products saw a year-on-year revenue increase of about 13% in the first half, achieving breakthroughs in both domestic and overseas markets; trifluoromethanesulfonic acid series products continued to grow, with revenue of about 212 million yuan in the first half, an increase of over 40% year-on-year. As of the end of the reporting period, the company had 98 products, covering nitrogen trifluoride, tungsten hexafluoride, inorganic gases, mixed gases, fluorocarbon gases, etc. Annual capacity for nitrogen trifluoride is 18,500 tons, putting it together with tungsten hexafluoride at the leading position in China and the world.

As for shareholder structure, Pairui Technology Co., Ltd. holds 69.17%, CSSC Investment Development Co., Ltd. holds 3.44%, and both together hold over 72%. The actual controller is China State Shipbuilding Corporation Limited. Among the top ten shareholders are several semiconductor-themed ETFs, including the CICC Semiconductor Materials Equipment ETF, Huaxia STAR Market Semiconductor Materials Equipment ETF, Harvest STAR Market Chip ETF, etc. J.P. Morgan Securities PLC holds 0.24% with its own funds, ranking tenth among shareholders. By the end of the reporting period, there were a total of 47,021 shareholders.

In the market, CSSC Special Gas closed down 1.57% at 251 yuan/share on July 17, with a latest total market value of 132.9 billion yuan.

What to Watch in the Second Half

Overall, the price rise cycle of tungsten hexafluoride is the biggest beta for CSSC Special Gas right now, but negative cash flow is a signal that needs continuous monitoring. There are several variables worth watching in the second half.

First, the price trend of tungsten hexafluoride and the progress of signing long-term overseas contracts. GF Securities points out that the expansion cycle is long and long-term contracts are weakening, so the price rise cycle will continue. If this judgment holds, the company’s performance may accelerate further in the second half. Signing overseas long-term contracts will lock in long-term revenue and smooth out cyclic fluctuations. If the trend of rising market share among clients such as Micron, Kioxia, Intel, etc. continues, globalization will open a second growth curve for the company.

Second, the timing of cash flow improvement. If the negative cash flow in the first half was mainly due to inventory, improvement should be seen as deliveries are confirmed in the second half. Turnover efficiency of accounts receivable and inventory is a key observation metric. The newly added 600 million yuan in short-term borrowings also shows the company is actively managing liquidity, so future changes in borrowing scale are worth following.

Third, progress on capacity expansion. The current annual capacity of 2,000 tons of tungsten hexafluoride is already running at full load; the time for new capacity launch will determine whether the company can accept more orders. The drop in R&D spending ratio to 3.55% also needs attention — at the critical stage of domestic substitution, whether R&D intensity is sufficient will affect long-term competitiveness.

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