CITIC Niya lifted first-half profit to 7.70 million yuan.

CITIC Niya Wine reported higher sales and a sharp improvement in profit for the first half of 2026, but the Chinese wine producer also posted a clear decline in gross margin and a deeper operating cash outflow, according to its semiannual report released on Aug. 25.

The company said revenue for the January-June period rose to 82.94 million yuan from 69.64 million yuan a year earlier. That was an increase of 13.30 million yuan, or 19.10%, showing a recovery in commercial activity during the period in China.

That sales growth, however, was accompanied by much faster growth in costs. Cost of sales climbed 41.92% to 38.13 million yuan. The increase in costs was nearly 23 percentage points higher than the revenue growth rate, which put pressure on profitability at the gross level.

Based on the figures in the report, CITIC Niya’s gross margin fell to about 54.0% from 61.4% a year earlier. That represents a deterioration of roughly 7.4 percentage points. Gross profit rose only modestly, increasing by about 2.04 million yuan to 44.81 million yuan, even though revenue increased by more than 13 million yuan.

The contrast between the top line and the margin trend was one of the central features of the first-half results. Revenue growth pointed to stronger business activity, but the rise in the cost of sales absorbed much of that benefit. The company did not provide enough detail in the report to separate the effect of pricing from changes in product mix, and it did not disclose sales volumes in liters.

At the net profit level, the results were stronger. Profit attributable to shareholders rose to 7.70 million yuan from 0.67 million yuan in the same period last year. That was an improvement of 7.02 million yuan. The company also reported adjusted results moving from a loss of 2.16 million yuan a year earlier to a profit of 3.76 million yuan in the first half of 2026.

The stronger bottom-line performance came despite the margin compression at the gross profit level, suggesting that factors below gross profit helped lift earnings. The semiannual report did not provide, in the information cited here, a full breakdown sufficient to explain every driver behind that change, but the headline figures show that the company converted a relatively small increase in gross profit into a much larger improvement in attributable earnings.

Cash flow moved in the opposite direction. CITIC Niya said operating cash flow worsened to negative 23.77 million yuan from negative 7.46 million yuan a year earlier. That was a deterioration of 16.31 million yuan. The company said the weaker operating cash flow was due in part to payments for grapes and to settlement of supplier balances from prior years.

That divergence between earnings and cash generation is likely to draw attention because it shows that the recovery in reported profit was not matched by an improvement in operating cash. For the first half, the business generated higher sales and better net income, but cash use increased as the company paid for raw materials and past obligations.

The figures were published in the company’s unaudited semiannual report for the first six months of 2026. The report presents a mixed picture for the period: a rebound in revenue and attributable profit, but also a notable squeeze in gross margin and a larger cash outflow from operations.