China Harmony Auto Holding Limited (Harmony Auto, 03836) reported a return to profitability for the six months ended 30 June 2026, driven by a sharp rise in overseas new-energy vehicle (NEV) sales and margin expansion.

Financial Performance • Revenue rose 26.1% year on year to RMB 12.15 billion, underpinned by strong growth in Hong Kong and overseas markets. • Gross profit jumped 85.00% to RMB 1.04 billion, lifting the gross margin to 8.5% (1H25: 5.8%). • Net profit reached RMB 16.27 million, a turnaround from the RMB 10.59 million loss a year earlier. Profit from operations almost doubled to RMB 169.67 million. • Loss attributable to owners narrowed to RMB 10.10 million (1H25: loss of RMB 11.80 million), translating into a basic and diluted loss per share of RMB 0.007. • Other income and gains fell 31.8% to RMB 169.41 million, weighed by foreign-exchange losses. • Selling and distribution expenses increased 45.5% to RMB 799.04 million; administrative expenses rose 41.4% to RMB 236.18 million. • Finance costs grew 22.7% to RMB 116.43 million amid higher borrowings.

Sales Volume and Mix • New-vehicle deliveries surged 68.5% to 51,674 units. • Hong Kong and overseas sales accounted for 77.8% of total deliveries (40,183 units), up 155.5% year on year. Domestic sales fell to 11,491 units. • Revenue from vehicle sales and related items advanced 29.5% to RMB 11.11 billion, representing 91.5% of total turnover. • After-sales service revenue slipped 2.0% to RMB 1.02 billion but maintained a robust gross margin of 39.3%.

Regional Trends • Mainland China revenue declined 20.5% to RMB 4.56 billion, reflecting softer luxury-car demand and intensified competition. • Hong Kong and overseas revenue nearly doubled to RMB 7.59 billion, equal to 62.5% of the Group total, propelled by BYD and Denza NEV distribution across 27 countries and 49 cities.

Balance-Sheet Highlights • Cash and bank balances stood at RMB 1.87 billion (31 Dec 2025: RMB 1.56 billion). • Bank loans and other borrowings rose 32.8% to RMB 5.37 billion; the gearing ratio increased to 63.7% (31 Dec 2025: 60.8%). • Inventories expanded 17.3% to RMB 2.76 billion; inventory turnover lengthened to 42.2 days from 39.4 days. • Net current assets improved 9.5% to RMB 1.22 billion.

Operational Developments • The Group operated 72 outlets in Mainland China and 146 outlets across Hong Kong and overseas as at 30 June 2026. • Capital expenditure totalled RMB 262.09 million, largely for overseas network expansion. • No interim dividend was declared. There were no material acquisitions, disposals, or connected transactions during the period, and no significant post-balance-sheet events were reported.

Outlook (Management Commentary) Management signalled a strategic shift from scale to profitability. In Mainland China, efforts will centre on optimising the luxury and NEV brand mix, tightening cost controls, and expanding high-margin after-sales and finance businesses. Overseas, the focus remains on deepening cooperation with BYD, enhancing store productivity, and developing NEV-related used-car and ancillary services to build a “second growth curve.”