Sichuan Development Longmang's production resumption at Baimu Phosphate Mine delayed; net profit expected to decrease by 45 million yuan

On the evening of August 17, Chuafa Longmiao simultaneously released its semi-annual report for 2026 and an announcement regarding the delayed resumption of production at its subsidiary. The company's overall operations showed steady progress in the first half of the year, with double growth in revenue and net profit excluding non-recurring items, a significant improvement in operating cash flow, and steady performance in its core phosphorus chemical business, alongside high growth in sectors such as new energy materials and feed-grade calcium phosphate. Affected by the production suspension for rectification due to a safety accident at its phosphate mine and the delayed resumption of production, the company's current revenue and profit will experience a phased decline.

Steady Revenue Growth and Continuous Recovery in Main Business Profitability

In the first half of 2026, Chuafa Longmiao achieved operating revenue of 5.397 billion yuan, a year-on-year increase of 14.82%; and realized net profit attributable to shareholders of 226 million yuan, a slight year-on-year decrease of 5.39%. After excluding the impact of non-recurring gains and losses, the company's **net profit excluding non-recurring items was 256 million yuan, a year-on-year increase of 7.36%**, indicating a steady recovery in the profitability of its core business.

The improvement in cash flow was particularly notable. The net cash flow from operating activities during the reporting period was 71.011 million yuan, a significant increase of 85.61% compared to the same period last year, reflecting the continuous improvement in the quality of the company's operations. As of the end of the period, the company's total assets stood at 22.953 billion yuan, an increase of 14.05% from the end of the previous year. The asset scale expanded steadily, and the overall asset-liability ratio remained stable and controllable.

All Chemical Segments Strengthen; New Energy Materials Business Doubles

In terms of business structure, the company's core phosphorus chemical business continued to exert its strength, and the advantages of integrated industrial chains became increasingly prominent. During the reporting period, the phosphorus chemical business achieved revenue of 4.801 billion yuan, a significant year-on-year increase of 25.28%, accounting for as much as 88.97% of the company's total revenue, serving as the foundation of the company's performance.

Performance in emerging sectors was impressive, with the new energy materials business experiencing a high-speed explosion, achieving revenue of 432 million yuan, a year-on-year increase of as much as 153.64%, demonstrating strong growth momentum. Regarding core products, benefiting from the consolidation of Tianbao Company and the recovery in market demand, revenue from feed-grade dicalcium phosphate reached 1.218 billion yuan, a significant year-on-year increase of 105.31%, with the product's market competitiveness continuously improving.

Overall, the company continues to deeply cultivate the entire phosphorus chemical industry chain, steadily advances the capacity ramp-up of new energy materials, strengthens resource support and technical breakthroughs, and continuously implements cost reduction and efficiency enhancement, thereby continuously increasing the resilience of its main business operations.

Sudden Safety Accident at Phosphate Mine; Mine Resumption Delayed by Two Months

While operations were improving, the company encountered phased production disruptions. A general roof-fall safety accident occurred at the Baizhu Phosphate Mine under Hubei Longmiao Phosphorus Chemical Industry, a wholly-owned subsidiary of the company. The accident resulted in one minor injury and one fatality. The company expresses its deep condolences to the deceased and has actively carried out rescue, aftermath, and reporting work.

Affected by the accident, the Baizhu Phosphate Mine has fully suspended production for rectification. Originally scheduled to resume production on August 15, 2026, the resumption time has been postponed because adjustments to mine management personnel and the identification and rectification of hazards have not yet been completed. Production resumption is delayed until October 15, 2026, with a total delay of approximately two months.

Quantified Impact of Accident; Net Profit Expected to Decrease by 45 Million Yuan

According to the company's preliminary calculations, the suspension and delayed resumption of production at the phosphate mine will significantly drag down the company's current performance. It is estimated to reduce current revenue by 136 million yuan, accounting for 1.4% of the company's 2025 revenue; and is expected to reduce current net profit by 45 million yuan, accounting for 10.9% of the 2025 net profit attributable to shareholders.

The company stated that this accident did not cause substantial damage to the mineral resources of the mine and will not have a major impact on the company's overall sustainable operations, industrial chain layout, or long-term development. The final financial impact will be subject to the annual audit results.

Compacting Safety Production Responsibilities and Fully Promoting Resumption of Work and Production

In response to this safety accident, Chuafa Longmiao stated that it will deeply learn from the lessons of the accident, comprehensively carry out the screening and rectification of safety hazards, strictly implement safety production management systems, compact safety responsibilities at every level, and continuously strengthen the full-process risk control of mines and chemical facilities.

Subsequently, the company will fully urge its subsidiary to accelerate the completion of rectification and acceptance work, striving for an early resumption of safe production at the mine, stabilizing the supply of phosphate rock resources, and ensuring the stable operation of the company's entire phosphorus chemical and new energy materials industry chain.