Zhiyuan Holdings (00990) has excellent interim results: operating profit surged 139%, and the main line of transformation is becoming more and more clear

On August 31, Zhiyuan Holdings (00990) announced the 2026 interim results. In the first half of the year, the company's revenue from continuing operations was about HK$14.964 billion, up about 49% year on year; gross profit was about HK$452 million and operating profit of about HK$395 million, up about 92% and 139% respectively over the same period last year; profit during the continuing operation period was about HK$440 million, up about 63% year on year. At the same time, the company achieved a net cash inflow of approximately HK$2,608 billion from operating activities.

Compared to the increase in revenue scale, what is more noteworthy is the improvement in the profitability of Zhiyuan Holdings. The company's gross margin for the first half of the year increased from about 2.36% to about 3.02% in the same period last year, an increase of about 0.67 percentage points; the growth rate of gross profit and operating profit was higher than the increase in revenue. In addition to its excellent performance in the interim report, the company also clearly included the lithium value chain and AI infrastructure-related businesses in the future development direction at the same time in the future development direction.

Iron ore trade is on the rise, and the traditional business is still “ballast stone”

Judging from the revenue structure, the commodity business is still the main operating foundation of Zhiyuan Holdings at present.

In the first half of 2026, the company's distribution, trading and processing business achieved revenue of approximately HK$14.540 billion, up from HK$9.737 billion in the same period last year. Among them, iron ore revenue reached approximately HK$11.969 billion, an increase of about 101% over HK$5.952 billion in the same period last year, accounting for about 80% of the revenue from continuing operations. Meanwhile, the continuing financial services business recorded revenue of approximately HK$424 million in the first half of the year.

As of the end of June, the net asset value of Zhiyuan Holdings was approximately HK$9.416 billion, a further increase from about HK$8.401 billion at the end of 2025; the balance to liability ratio was about 9%, and the amount of undrawn bank letters of credit was approximately HK$3.288 billion. In terms of cash flow, net cash from operating activities in the first half of the year was approximately HK$2,608 million, an increase of about 9.6% over about HK$2,379 billion in the same period last year, and continued to maintain net operating cash inflows.

Focus on the main line, and the path of strategic transformation gradually surfaced

Going back to the company's series of announcements since this year, the path of strategic transformation of Zhiyuan Holdings has gradually become clear. On the one hand, the company actively lays out the lithium value chain and extends upstream to new energy metals.

In April of this year, the company announced that it had signed an agreement with Tibet Everest Resources (Hong Kong) to acquire resources for the Salt Lake Project in Argentina. A month later, the wholly-owned subsidiary Shanghai Jingdian signed an agreement with the Dazhong Mining subsidiary to secure 150,000 tons of spodumene ore procurement and processing rights. In the interim statement, the “lithium value chain” has entered the company's official future outlook. Management said that the lithium value chain is an important connecting point for the company's extension from traditional commodity business to the new energy sector, and is promoting industrial layout and talent introduction around spodumene ore, processing, lithium products, and upstream resources.

On the other hand, the company sold financial assets, stopped non-core mergers and acquisitions, and concentrated capital and management resources on a new strategic line.

On July 9, Zhiyuan Holdings announced that it plans to sell some of its financial services-related subsidiaries to the US stock listed company Marex Group Limited. The net proceeds from the sale are estimated to be approximately HK$1,299 million; the company expects to confirm sales proceeds of approximately HK$624 million. On the same day, the company also announced the termination of a previously proposed 60% share acquisition transaction, and explained that the termination of the transaction would facilitate the concentration of resources in the lithium value chain and upstream and downstream of the AI industry, and carry out strategic transformation around industrial applications related to resources, energy, and AI infrastructure.

The AI industry layout has entered the medium- to long-term observation window

According to media reports for the first time in May, Shanghai Jiedian, a wholly-owned subsidiary of Zhiyuan Holdings, became a new shareholder of Chaoxun Intelligent Computing (Beijing) Technology. Since then, the company stated in relevant announcements and public information that it will continue to pay attention to the development opportunities of industrial applications related to resources, energy and AI computing power infrastructure on the basis of existing business development.

In this interim report, the company officially upgraded statements related to the AI industry as part of its future strategy. Management said in the announcement that the rapid development of the artificial intelligence industry is redefining the value of resources and energy, and the company has a certain foundation in cross-border resource allocation, supply chain management and industrial cooperation. The company will focus on strategic transformation in artificial intelligence infrastructure and other related fields, and has begun planning and implementing related work to support subsequent business growth, and will make timely announcements in accordance with relevant requirements. The company's layout in the AI industry has entered the medium- to long-term observation window and is worth paying attention to.