Xiaoxing, first-quarter performance improved... Operating profit increased by 15.6%

Xiao Xing’s consolidated financial statements for the first quarter of 2026 show sales of 530.2 billion won, operating profit of 94.6 billion won, and although sales decreased slightly, profitability has improved. According to data released on the 24th, sales decreased by 4.3% compared to the same period last year, but operating profit increased by 15.6%. Analysis suggests that although external scale has shrunk, the recovery of major subsidiaries’ performance and improvements in profit structure have driven the company’s overall performance.

The core of this performance improvement lies in the increase in equity method earnings. The equity method is an accounting approach that reflects the performance of associated companies (not subsidiaries) based on ownership proportion. As Xiao Xing TNC and Xiao Xing Heavy Industries’ performance improves, they positively impact Xiao Xing’s profits. Additionally, Xiao Xing TNS, which operates ATMs and financial automation equipment, has also seen improved profitability, contributing to the growth of overall operating profit. The company explained that, under the combined influence of these factors, profits in the first quarter have improved.

Among subsidiaries, Xiao Xing Heavy Industries is the most notable. In the first quarter, sales reached 13.58k trillion won, with an operating profit of 152.3 billion won, representing year-over-year increases of 26.2% and 48.7%, respectively. The proliferation of artificial intelligence has led to increased data center investments, and the global demand for power infrastructure such as electrical equipment and power transmission and distribution facilities has expanded, which is considered a background factor driving performance. Xiao Xing Heavy Industries believes that if high-margin orders are officially reflected in sales in the future, the pace of profit improvement could accelerate further. The construction division has also contributed to performance improvements by reducing one-time expenses and strengthening risk management.

Xiao Xing TNC also maintained steady growth. In the first quarter, sales were 20.94k trillion won, with an operating profit of 86.2 billion won, up 7.2% and 11.4% year-over-year, respectively. The global increase in sales prices and volume of main products like spandex, as well as the establishment of new supply channels by the trading division, have had positive effects. Growth in specialty gas sales and reduced manufacturing costs have also contributed to profit improvements. It is believed that, as efforts in fibers, trading, and industrial materials fields advance simultaneously, the foundation for performance will further strengthen.

Xiao Xing Chemical, which had previously faced difficulties due to industry downturns, also achieved an operating profit of 300 million won in the first quarter, turning losses into profits. Sales reached 587 billion won, a 2.5% increase year-over-year. The company explained that this was the result of flexible responses to market fluctuations in polypropylene and dehydrogenation processes, with improvements in the spread between product prices and raw material costs (i.e., profit margin). The Vietnam plant, after completing scheduled maintenance at the end of 2025, resumed normal operations, with production and sales continuing to expand; optical films improved profitability due to increased sales in China and cost reductions. The new polymer material polyceton also achieved cost savings. Looking ahead, if sales of connectors and vacuum cleaner parts for BYD in the Chinese market increase, there is potential for further profit improvement. If this trend continues, and given the ongoing demand for power infrastructure and high-value-added materials, it is expected to drive the recovery of major subsidiaries’ performance.