GHW International sees profit surge despite falling gross margin

GHW International reported a profit of 7.9 million yuan for the six months ended June 30, 2025, a substantial increase from 4.4 million yuan in the same period last year. Revenue rose 3.7% to 1,856.7 million yuan (2024: 1,790.2 million yuan). This growth was primarily fueled by strong performance in the Green Products and Iodine Derivatives and Supporting Products segments, which saw revenue increases of 17.7% and 33.6% respectively.

The profit increase was largely due to a rise in net exchange gains and a 7.5 million yuan value-added tax credit refund. However, gross profit decreased from 194.5 million yuan in 2024 to 170.5 million yuan in 2025, with the overall gross profit margin falling from 10.9% to 9.2%. This decline was attributed to intense market competition, decreased domestic demand, production disruptions, and rapidly increasing raw material costs.

Despite these challenges, the company's total assets reached 2,090.5 million yuan, with cash and cash equivalents at 155.3 million yuan. The gearing ratio increased to 146.6% as of June 30, 2025, mainly due to higher borrowings. The company did not recommend an interim dividend for the period.