On August 20, Hengdian Group DMEGC Magnetics Co., Ltd. (Hengdian DMEGC) released its semi-annual report for 2026, showing first-half revenue of 12.342 billion yuan, a 3.41% year-on-year increase, with net profit attributable to shareholders reaching 948 million yuan, down 7.03%. After deducting non-recurring gains and losses, net profit stood at 811 million yuan, a 24.28% decline.

Against the backdrop of a deep adjustment in the solar industry, these results carry significant weight. The company's photovoltaic segment generated 7.369 billion yuan in first-half revenue, down 8.50% year-on-year, yet shipments exceeded 12GW, maintaining profitability with a gross margin of 11.18%.

The company noted that despite multiple pressures—including a temporary dip in industry demand, escalating trade barriers, and rising raw material costs—it managed to break through by strictly controlling expenses and cultivating differentiated markets. Several 100MW-scale single-site projects in key European markets were delivered on schedule.

It is worth noting, however, that the photovoltaic business accounts for about 59.7% of revenue but contributes only 42.5% of gross profit, while the magnetic materials, lithium battery, and components segments—representing 40% of revenue—generate nearly 60% of gross profit. This structural mix explains how Hengdian DMEGC managed to earn 948 million yuan in an environment where most solar players are suffering losses: the photovoltaic division focuses on "maintaining volume and locking in slim margins," while the real profit depth comes from magnetic materials—particularly the components business driven by AI server inductors—and lithium batteries.

As of the end of June, the company held 8.889 billion yuan in cash on its books, accounting for 31.31% of total assets. Net operating cash flow was 729 million yuan, remaining positive, though down 57.12% year-on-year. The decline in after-deducting net profit was notably steeper than the drop in net profit itself.

It is important to emphasize that since the solar industry entered a phase of widespread losses, Hengdian DMEGC has consistently maintained positive profitability, making it one of the few module manufacturers in the sector that continues to generate profits.