China-based integrated-circuit designer CE Huada Tech (00085) reported 1H 2026 revenue of HK$1.17 billion, up 5.20% year on year, driven by higher sales volumes in security MCU, SIM and bank-card chips. Profit attributable to shareholders fell 9.76% to HK$125.01 million as rising wafer, assembly and testing costs and a lower average selling price compressed margins.

Gross profit declined 1.43% to HK$408.16 million; gross margin narrowed to 34.9% from 37.2% a year earlier. Operating profit slipped 10.19% to HK$135.98 million, and basic EPS eased to HK6.16 cents from HK6.83 cents.

Product momentum remained solid: total chip shipment volume advanced 21.8% year on year, buoyed by robust demand for security MCUs and a rebound in third-generation social-security cards. However, intensified domestic competition led to lower sales of security SE chips, while timing adjustments by identity-authentication clients also weighed on volume.

Operating cash flow more than doubled to HK$58.49 million (1H 2025: HK$25.51 million), aided by working-capital improvements. Net cash generated from investing activities reached HK$161.40 million, supported by a HK$172.13 million reduction in time deposits and restricted cash. Capital expenditure rose to HK$28.00 million (1H 2025: HK$22.21 million).

The balance sheet remained strong with cash and cash equivalents of HK$857.38 million and no pledged assets. Bank and other borrowings stood at HK$287.89 million, all short-term and Renminbi-denominated, leaving the company in a net cash position. Committed but undrawn facilities totalled HK$1.05 billion. The current ratio improved to 2.13x (31 December 2025: 2.46x).

Total equity increased 6.1% to HK$2.75 billion on currency translation gains, while research and development spending grew 5.1% to HK$234.33 million—equivalent to 20.0% of revenue—as the group advanced security SE, MCU and IoT/IoV chip projects.

The board declared no interim dividend for 1H 2026 (1H 2025: nil) after having paid a final dividend of HK$73.08 million for FY 2025 earlier in the period.

Management expects stable global demand for smart-card and secure-element chips but anticipates continued pressure on costs and pricing amid tight industry capacity and heightened competition. The company plans to pursue new market segments, expand overseas channels and maintain disciplined cost control while accelerating product innovation.