MAANSHAN IRON (HKEX: 00323) has announced its financial projections for the first half of 2026. The company expects to report a net loss attributable to shareholders of approximately RMB 72 million. This figure represents a reduction in losses of around RMB 3 million compared to the same period last year.

However, the net loss attributable to shareholders after excluding non-recurring gains and losses is projected to be approximately RMB 226 million. This indicates an increase in losses of about RMB 118 million year-on-year.

During the first half of 2026, the domestic steel industry faced a challenging environment characterized by strong supply and weak demand. The average steel price index declined compared to the previous year, while the costs of key raw materials and fuels remained persistently high. This squeeze on margins, with the spread between market selling prices and purchase costs narrowing year-on-year, intensified operational pressures for steel enterprises.

Confronted with this complex and severe market landscape, the company maintained its focus on enhancing quality and efficiency. It diligently advanced key initiatives including collaborative support, cost reduction, and product portfolio optimization. These efforts led to a continuous improvement in production and operational performance.

The company strengthened its cost-accounting management, intensifying efforts to lower costs related to molten iron, logistics, energy, and quality. These measures effectively reduced the cost per ton of steel and steadily improved operational efficiency. Concurrently, the firm persistently optimized its product mix, increasing the sales proportion of high-value-added products under its "2+2+N" strategy, thereby further enhancing product quality and market competitiveness.

For the reporting period, the company's majority-owned subsidiary, Maanshan Iron & Steel Co., Ltd., is expected to achieve a net profit of approximately RMB 103 million. Another subsidiary, Anhui Changjiang Steel Co., Ltd., is projected to report a net profit of around RMB 151 million. Both figures represent year-on-year growth.

Despite these positive developments, the company's overall first-half performance was impacted by losses. This was primarily due to an investment loss recognized under the equity method. The loss stemmed from an associate company, Henan Jinma Energy Co., Ltd. (Jinma Energy), whose subsidiary, Xinyang Steel Jingang Energy Co., Ltd. (Xinyang Jingang), was ordered by a court to enter bankruptcy liquidation proceedings.

During the reporting period, the company's non-recurring gains and losses are estimated to be approximately RMB 154 million, an increase from the previous year. This change is mainly attributed to the aforementioned bankruptcy proceedings of Xinyang Jingang. As the subsidiary was taken over by a bankruptcy administrator and consequently deconsolidated from Jinma Energy's financial statements, Jinma Energy derecognized cumulative losses from prior years' consolidated statements that exceeded its actual obligations to Xinyang Jingang. This derecognition was recorded as a disposal gain or loss in the current period.