Comtec Solar (the “Group”) reported interim results for the six months ended 30 June 2026, showing a sharply reduced net loss and a marked improvement in gross profitability as the company pivots toward higher-margin engineering, procurement and construction (EPC) contracts for distributed photovoltaic and flywheel-battery hybrid (FLBH) storage systems.
Revenue and Gross Profit • Consolidated revenue slipped 4.4% year on year to RMB141.73 million, mainly due to an expected collapse in logistics-services income after two major contract terminations in early 2025.
• EPC consulting income surged 47.7% to RMB43.80 million, offsetting weaker power-generation sales (–RMB1.28 million) and the near-zero contribution from logistics.
• Cost of sales fell 17.7% to RMB116.84 million, lifting gross profit to RMB24.90 million versus RMB6.32 million a year earlier; gross margin expanded to 17.6% (1H 2025: 4.3%).
Profitability • Loss before tax narrowed to RMB5.78 million from RMB23.08 million.
• A RMB14.19 million foreign-exchange gain (RMB appreciation) swung “other gains and losses” to a RMB15.15 million gain (1H 2025: RMB1.91 million loss).
• Net loss attributable to shareholders contracted 91% to RMB1.99 million (1H 2025: RMB22.80 million). Basic and diluted loss per share were RMB0.19 cents, down from RMB2.15 cents.
Operating Expenses and Impairments • Selling and distribution costs rose 124.5% to RMB1.06 million on increased marketing for EPC contracts.
• Administrative expenses inched up 11.3% to RMB14.56 million, reflecting ongoing cost controls.
• Net impairment losses on financial assets increased to RMB10.31 million (1H 2025: RMB3.97 million), mainly tied to aging receivables in the logistics segment.
• Finance costs climbed 50.5% to RMB20.93 million after drawdown of higher-rate loans.
Segment Performance • Solar & Power Storage: Revenue reached RMB141.73 million (–4.4%), generating a segment loss of RMB12.13 million. The Group operated 11 rooftop solar projects and delivered strong EPC growth, including contracts for flywheel-battery storage systems in Shanxi Province.
• Logistics Services: Revenue fell to a negligible level after the loss of two major customers; the segment posted breakeven results.
Balance Sheet and Cash Flow • Current ratio improved to 1.00 from 0.58 at end-2025; working-capital deficit narrowed to RMB0.80 million (end-2025: RMB251.20 million).
• Net liabilities fell to RMB149.57 million from RMB223.69 million, aided by an RMB80.36 million capital injection from non-controlling interests.
• Net operating cash outflow was RMB261.85 million, driven by inventory build-up and contract-related working capital; financing inflows of RMB271.25 million (including a RMB200.00 million new bank loan and shareholder funding) offset operating and investing outflows, lifting cash to RMB11.28 million.
Capital Structure and Liquidity • Total interest-bearing borrowings rose to RMB295.66 million (end-2025: RMB98.55 million) after securing a RMB350.00 million six-year bank facility, of which RMB200.00 million was drawn by period-end at c.4% interest.
• Loans from shareholders stood at RMB61.72 million, bearing interest of up to 10%.
• Outstanding USD-denominated convertible bonds due July 2021 were reduced to USD0.10 million (RMB0.67 million) and remain overdue.
Strategic Developments • The 20 MW Yongji FLBH storage plant entered commercial operation on 1 March 2025; additional EPC mandates for similar systems, including the Shilou project in Shanxi, boosted revenue.
• Comtec is evaluating a 150 MW Fushan County flywheel-battery storage investment, targeting further growth in North-East China’s energy-storage market.
• The planned acquisition of logistics-technology platform Zhilian Cloud remains under negotiation following the target’s internal restructuring.
Dividend • No interim dividend was declared (1H 2025: nil).
Outlook Management will prioritise debt restructuring, further EPC project wins under China’s “carbon-peak/carbon-neutrality” agenda, and expansion into energy storage and intelligent logistics to reinforce the transition toward higher-margin, asset-light operations.