Press Release

(For Immediate Release)

China XLX Announces 2026 Interim Results

Net Profit Surged by 62% YoY to Approximately RMB1.229 Billion

2026 Interim Results Highlights:

(30 August 2026, Hong Kong) China XLX Fertiliser Ltd. (“China XLX” or the “Company”, together with its subsidiaries collectively referred to as the “Group”) (stock code: 01866.HK) announced that the Group posted revenue of approximately RMB 15.74 billion for the six months ended 30 June 2026, up by 24% year-on-year. Its net profit surged by 62% year-on-year to approximately RMB 1.229 billion; the net profit attributable to owners of the parent amounted to approximately RMB 921 million, representing a significant increase of 54% year-on-year and approaching the full-year net profit of 2025.

The Group achieved outstanding results in the reporting period mainly because the core benefits arising from the scaling up of businesses, structural upgrades and refined management and operations were fully released. While the commissioning of new production facilities drove the sales volume growth in core products like urea and liquid ammonia, they effectively expanded the supply capacity of its core products. The Group’s competitive advantages of low-cost were further strengthened on large-scale operations.

Underpinned by the iteration of product mix and marketing system, high-efficiency fertilisers made up greater proportion of the Group’s total output and sales, thereby driving continual improvement in the structure of product profitability. In addition, the Group capitalized on the price difference between domestic and overseas markets to adjust its sales strategy for these markets. It bolstered overseas sales of melamine and other products, whereby raising the average selling price of its products.

Through the strengthening of its refined management system, the Group succeeded in striking a balance between scale expansion and cost control. Although the selling, administrative and financial expenses edged up on business expansion, the ratio of these expenses to total operating expense remained stable when compared with the same period last year. Moreover, the Group further optimized the debt structure, with the proportion of short-term borrowings to total borrowings dropped by 0.5 percentage point from the beginning of the reporting period. As a result, its working capital increased by approximately RMB 1 billion and the working capital gap narrowed by 25%. The Group’s financial soundness was thus further enhanced.

During the reporting period, revenue from urea sales reached approximately RMB 3.981 billion, up by 23% year-on-year. With the successful commissioning of the Jiujiang Phase II Project, the urea output in the period grew by 560,000 million tonnes from a year ago and the sales volume of urea grew by 21% year-on-year. As the Group further optimized its product structure and expanded the sales of high-efficiency humic acid black urea, the average selling price of urea for the period advanced by 2% year-on-year. The average gross profit margin of urea increased by 6 percentage points year-on-year to 27%.

Revenue from compound fertiliser sales in the period amounted to approximately RMB 4.103 billion, up by 15% year-on-year. As the Group accelerated the transformation of its marketing model, it boosted the market share in core regions to over 60% through extensive channel development and differentiated value-added services, resulting in a 12% year-on-year increase in the sales volume of compound fertilisers. Meanwhile, the average selling price of compound fertilisers grew by 3% year-on-year on the price increase of major feedstocks like potash and phosphate fertilisers along with stepped-up efforts in the marketing of high-efficiency fertilisers.

During the reporting period, both of the raw materials segment and the chemicals segment achieved satisfactory sales performance. Revenue from methanol sales grew by 18% year-on-year to approximately RMB 1.93 billion, revenue from the sale of liquid ammonia increased nearly two folds to approximately RMB 1.586 billion, revenue from melamine sales advanced by 20% year-on-year to approximately RMB 454 million, revenue from DMF sales increased by 13% year-on-year to approximately RMB 661 million, and revenue from polyformaldehyde sales grew by 27% year-on-year to approximately RMB 292 million.

In the first half, the Group continued to optimize the debt structure and implemented the initiatives to reduce interest expenses. It effectively hedged against incremental interest expenses with the proportion of finance costs dropped by 0.1 percentage point from a year ago. The high-interest borrowings were replaced in an orderly manner, resulting in approximately 0.3 percentage point year-on-year reduction in the average interest rate of total borrowings. Low-cost financings were precisely invested in the construction of new production facilities, which will boost the Group’s capacity and overall profitability.

Looking ahead to the second half, Mr. Liu Xingxu, Chairman of China XLX, noted that urea selling price is expected to be lower than the first half as overall fertiliser supply in the market tends to become abundant. However, the domestic demand and supply condition of nitrogen fertilisers will temporarily improve on the relaxation of export regulations and industrial demand is expected to steadily pick up. These factors will give a boost to the Group’s operations. Meanwhile, agricultural demand for compound fertilisers is expected to be unleashed on the stockpiling for autumn fertilization and their prices will be underscored by feedstock costs. Therefore, the overall fertiliser market will continue to grow steadily. As for chemicals products, while geopolitical tensions gradually recede in conjunction with reduced cost-driven price support, chemical product prices are forecast to return to reasonable ranges. Riding on the strengths of its integrative coal-to-chemical industrial chain, the Group can effectively mitigate cyclical fluctuations in the market and sustain stable production and operations.

In terms of project development, the chemical new materials and urea plant at the Xinxiang Base and the major integrated complex at the Zhundong Base are scheduled for commissioning in the third and fourth quarters of this year respectively. Meanwhile, development of the flagship project at the Guangxi Base is advancing as planned and it is targeted for completion and commissioning in the third quarter of 2027.

The phased commissioning of new facilities will enable the Group to realize greater economies of scales and to further reduce the unit production costs, thereby reinforcing its cost leadership. Moreover, they will allow the Group to substantially raise the sales proportion of differentiated products and to allocate more resources to develop high-margin products such as black urea, liquid fertilisers and water-soluble fertilisers to further bolster its product competitiveness. Meanwhile, the automated production systems at the new production bases will drive substantial upgrade to the Group’s smart manufacturing standards and reinforce its refined operational management capability. There is still ample room for the Group to optimize various operating costs. As the benefits brought by large-scale development are to be continuously released, its overall profitability is expected to steadily improve.

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About China XLX Fertiliser Ltd.

China XLX Fertiliser Ltd. is one of the largest and most cost-efficient coal-based urea producers in China. It is principally engaged in developing, manufacturing and selling of urea, compound fertiliser, methanol, dimethyl ether, melamine, furfuryl alcohol, furfural, 2-methylfuran, pharmaceutical intermediates and related differentiated products. The Group adheres to the development strategy of “maintaining overall cost leadership and creating competitive differentiation" while strengthening the core fertiliser operations. With support of the resources in Xinxiang, Xinjiang and Jiangxi, it extends the value chain to upstream new energy and new materials and diversifies into coal chemical related products. The Company’s shares (stock code: 01866.HK) are traded on the main board of the Hong Kong Stock Exchange.

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