Hangzhou First Applied Material (603806.SS): 1H26 Preliminary Net Profit +75% YoY, Beat on Margin Recovery

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Hangzhou First Applied Material (603806.SS): 1H26 Preliminary Net Profit +75% YoY, Beat on Margin Recovery

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13 Jul 2026 08:50:17 ET │ 13 pages

Hangzhou First Applied Material (603806.SS)

1H26 Preliminary Net Profit +75% YoY, Beat on Margin Recovery

CITI'S TAKE

Buy Hangzhou First reported preliminary net profit +75.4% yoy to Rmb869m

in 1H26E, including +489.3% yoy and +78.8% qoq to Rmb558m in 2Q26E Price (13 Jul 26 15:00) Rmb13.550

boosted by higher sales price of PV films supported by increased oil prices, Target price Rmb21.000

as well as volume and margin expansions from photoresist dry film sales. Expected share price return 55.0%

1H26E net profit was a beat, representing 55% of consensus (Bloomberg) Expected dividend yield 2.6%

2026E earnings. We estimate unit dollar profit from PV film sales Expected total return 57.6%

recovered to Rmb0.84/m2 in 2Q26, up from Rmb0.43/m2 in 1Q26 and Market Cap Rmb35,349M

Rmb0.11/m2 in 2Q25, offsetting the impact of sales volume drop by -21.7% US$5,222M

yoy and -8.4% qoq to approximately 600m m2 in 2Q26. HZ First’s

shipment decline is much lower than PRC solar installation drop, which

fell 86.8% yoy to 18.2GW in April-May 2026, likely due to market share

gain and increasing overseas sales. Reiterate Buy on improving Asian Utilities

profitability and rising profit contribution from PCB dry film business. China Solar Sector

Air MaAC

1H26 preliminary result beat - Hangzhou First reported preliminary net profit +852-2501-7450

air.ma@citi.com+75.4% yoy to Rmb869m in 1H26E, including +489.3% yoy and +78.8% qoq to

Rmb558m in 2Q26E. Excluding one-off items (mainly investment gains and Pierre Lau, CFA

impairment reversals) recurrent net profit was +67.5% yoy to Rmb752m in 1H26E, pierre.lau@citi.com