Chery H1 profit falls as overseas revenue surges 51%

• Overseas revenue accounted for 69% of Chery Auto’s H1 revenue, but lower foreign-exchange gains weighed on its financial performance.
• Lower foreign-exchange gains and higher R&D and administrative expenses offset growth in gross profit.

Chery Auto (HKEX: 9973) saw its profit decline in the first half, as foreign-exchange changes weighed on its overseas business, which contributed nearly 70% of revenue.

China’s largest auto exporter said on Thursday that profit attributable to owners of the company was 8.57 billion yuan ($1.26 billion) in the first half of 2026, down 11.7% year-on-year.

Profit for the period was 9.02 billion yuan, down from 9.91 billion yuan a year earlier, with a net profit margin of 6.3%.

Revenue was 143.28 billion yuan, up 1.2% year-on-year and broadly flat. Gross profit rose 25.1% to 23.04 billion yuan.

Gross margin increased to 16.1% from 13.0% a year earlier. The company said the improvement was mainly driven by the expansion of its overseas business, where sales carry higher gross margins than in the Chinese market.

The profit decline was mainly due to factors outside core operations. Other income and gains fell 27.1% to 6.03 billion yuan from 8.27 billion yuan, primarily due to lower foreign-exchange gains.

Research and development expenses rose 28.3% year-on-year to 6.67 billion yuan, with spending directed toward electrification technologies, vehicle platforms, assisted driving and smart cockpits. Administrative expenses increased 24.1% to 3.29 billion yuan.

Income tax expenses rose 18.6% to 2.22 billion yuan. The share of profits from joint ventures and associates fell 37.9% to 437 million yuan.

Revenue from overseas markets reached 98.97 billion yuan, up 51.0% year-on-year and accounting for about 69% of total revenue. As of June 30, Chery operated 12 major production bases globally, including 3 overseas.

Revenue from the new energy vehicle (NEV) business rose 63.8% year-on-year to 59.28 billion yuan, increasing its share of total revenue to 41.4% from 25.6% a year earlier.

Revenue from internal combustion engine (ICE) vehicles fell 24.8% to 69.51 billion yuan from 92.45 billion yuan. Overall passenger vehicle revenue was broadly flat at 128.8 billion yuan.

Cash and cash equivalents stood at 63.42 billion yuan, up 35.1% from the end of 2025. Bank loans and other borrowings fell to 10.00 billion yuan from 15.92 billion yuan.

Finance costs dropped 62.1% to 549 million yuan due to loan repayments. The company’s debt-to-asset ratio was 81.7%.

Chery Auto sold 1,275,076 vehicles in the first half, up 7.8% year-on-year. July sales reached 261,876 vehicles, up 24.7% year-on-year, according to data compiled by CnEVPost.

The company said it will expand its product lineup, strengthen brand positioning and increase investment in next-generation technology research and development in the second half, while continuing to advance its global expansion.

Chery’s UK R&D center will be located in Bedfordshire, England, and is set to open in late fall this year.

($1 = 6.7808 yuan)