ZHONGGAN COMM (Zhonggan Communication (Group) Holdings Ltd.) reported a net loss of RMB3.34 million for the six months ended 30 June 2026, reversing a profit of RMB4.20 million a year earlier. Basic earnings per share slipped to a negative RMB0.01 from a positive RMB0.013.

Revenue rose 12.3% year on year to RMB179.30 million, driven by a 16.9% expansion in Telecommunications Infrastructure Services to RMB176.87 million. Digitalisation Solution Services contracted sharply, contributing only RMB1.50 million versus RMB8.42 million in the prior-year period. Rental income from investment property added RMB0.92 million.

Cost of sales increased 14.6% to RMB152.98 million, limiting gross profit to RMB26.33 million, almost flat versus last year. Gross margin narrowed to 14.7% from 16.4%, mainly due to lower profitability in infrastructure projects and the revenue mix shift.

Key operating items exerted additional pressure: • Other net income swung to a loss of RMB0.53 million from a gain of RMB7.18 million, reflecting lower government grants and higher foreign-exchange losses. • Impairment charges on trade receivables and contract assets rose 37.3% to RMB9.09 million. • Finance costs climbed 28.9% to RMB11.66 million on larger average bank borrowings of RMB603.11 million.

Operating profit dropped 43.0% to RMB7.63 million. After finance costs and a deferred-tax credit of RMB0.69 million, the group recorded a pre-tax loss of RMB4.03 million.

Balance-sheet highlights as at 30 June 2026: • Total assets increased to RMB1.56 billion, supported by higher contract assets. • Net assets edged down 0.8% to RMB428.20 million. • Cash and cash equivalents stood at RMB34.98 million, compared with RMB36.84 million at end-2025. • The gearing ratio (total borrowings/total equity) rose to 1.41× from 1.31× six months earlier.

Net operating cash outflow reached RMB33.01 million, reflecting higher working-capital needs, particularly a RMB54.83 million rise in contract assets. Financing activities generated a RMB31.30 million inflow, largely from new short-term bank loans.

The board did not declare an interim dividend.

Management cited intensified market competition, deferred capital expenditure by telecom operators and higher fixed costs as the main factors behind the earnings reversal. The company plans to focus on cost control, reinforce its safety and risk-management frameworks, and capitalise on 5G and computing-network opportunities in the second half of the year.