Chery H1 net profit falls 11.7% as overseas revenue surges 51%

Key Takeaways:

Chery H1 revenue RMB 143.28 billion, up 1.2%; net profit RMB 8.57 billion, down 11.7%
Overseas revenue RMB 98.97 billion, up 51%, now 69% of total revenue
NEV revenue RMB 59.28 billion, up 63.8%, rising to 41.4% of total

Chery Automobile (9973.HK) reported first-half net profit of RMB 8.57 billion ($1.26 billion), down 11.7% year-on-year, as overseas revenue surged 51% to RMB 98.97 billion and new energy vehicle sales accelerated.

"The group's diversified multi-brand strategy has further enhanced competitiveness, extending its business footprint into both emerging and mature markets," Chery said in its interim results announcement Thursday.

Revenue reached RMB 143.28 billion, up 1.2% year-on-year. Gross profit rose 25.1% to RMB 23.04 billion, with gross margin expanding from 13.0% to 16.1%. Passenger vehicle gross margin improved from 12.4% to 15.6%, driven by a higher share of overseas sales, which carry fatter margins than domestic China deliveries. New energy vehicle revenue climbed 63.8% to RMB 59.28 billion, representing 41.4% of total revenue, up from 25.6% a year earlier. Internal combustion engine vehicle revenue fell 24.8% to RMB 69.51 billion.

The profit decline stemmed largely from non-operating factors. Other income and gains dropped 27.1% to RMB 6.03 billion, primarily due to lower foreign-exchange gains. Research and development expenses rose 28.3% to RMB 6.67 billion, directed toward electrification, vehicle platforms, assisted driving and smart cockpits. Administrative expenses increased 24.1% to RMB 3.29 billion, while income tax expenses climbed 18.6% to RMB 2.22 billion. The share of profits from joint ventures and associates fell 37.9% to RMB 437 million.

Overseas markets have become the core profit engine. Chery, China's largest auto exporter for more than two decades, operates 12 major production bases globally, including three overseas facilities, with sales and service networks across Europe, South America, Africa and the Middle East. The company sold 1,275,076 vehicles in the first half, up 7.8% year-on-year, with July sales reaching 261,876 units, up 24.7%.

Cash and cash equivalents stood at RMB 63.42 billion, up 35.1% from end-2025, while bank loans fell to RMB 10.00 billion from RMB 15.92 billion. Finance costs dropped 62.1% to RMB 549 million. The board resolved not to declare an interim dividend, extending a capital retention strategy that saw a final dividend of RMB 0.86 per share paid in March 2026.

Shares rose 3.2% to HK$26.2 on results day. The company said it will expand its product lineup, strengthen brand positioning and increase investment in next-generation technology in the second half while continuing its global expansion.

The results signal that Chery's overseas push is reshaping its margin profile even as near-term costs weigh on net profit. Investors will watch second-half overseas sales momentum, the pace of new EV launches, and whether gross margin gains can be sustained as the company deepens its European expansion.

This article is for informational purposes only and does not constitute investment advice.