Shenda Swings to Profit on Overseas Auto Unit, But Share Supply and Weak Textiles Weigh
H1 profit turnaround confirmed Shenda reported first-half net profit of 37.27 million yuan, reversing last year's 53.64 million yuan loss. The swing came mainly from its overseas auto-interiors unit Auria turning profitable and strong income from its US affiliate NYX. This is the core reason the stock has a positive story.
The confirmed profit turnaround is the main fundamental force behind the stock's move.
Euro borrowings replaced, killing exchange losses Last year's loss was largely caused by an 83.6 million yuan exchange loss on euro borrowings at its overseas unit. Shenda swapped those euro loans for US dollar loans, removing that drag. This is a one-time fix, not a sign of stronger underlying sales, so its boost may not repeat.
It explains the specific financial cause of the profit swing and its limited durability.
213 million restricted shares became tradable On July 28, 213 million locked-up shares from a 2022 private placement became free to trade. That sharply raises the number of shares that can be sold, which can pressure the price if holders decide to exit. This overhang is a real counterweight to the good earnings news.
It is a concrete supply increase that can push the price down despite improving profits.
Auto interiors strong, textiles and trade weak The auto interiors and acoustics business is booming, with new energy vehicle projects over 96% of sales and overseas doing well. But the textile materials unit saw profit fall on higher raw material costs and tough competition, and import-export revenue shrank on weak demand and trade barriers. The good and bad roughly offset.
It shows the profit turnaround is not broad-based, with two of three business lines still struggling.