Chinese automaker Chery reported second-quarter revenue of 77.4 billion yuan, a 5% increase from the prior year but an 11% shortfall against analyst expectations. The company attributed the growth to improved product mix and strong export performance, despite ongoing cost inflation pressures.
Net profit fell 13% year-over-year to 4.4 billion yuan, though it rose 5% from the first quarter and exceeded consensus by 5%. Core net profit, which excludes certain items, climbed 64% quarter-over-quarter to 5.5 billion yuan, beating estimates by 22%.
Gross profit margin expanded by 2.5 percentage points year-over-year to 16.1%, supported by product mix enhancements and robust export demand. The margin edged up 0.1 percentage point from the first quarter, though operating margin contracted by 0.8 percentage points to 4.7%.
Selling, general, and administrative expenses rose to 6.5% of revenue, up 0.3 percentage points from the prior quarter, while research and development costs increased to 4.9%, a 0.6 percentage point increase. The blended average selling price for the first half of 2026 stood at 112,000 yuan, down 6% year-over-year but up 3% from the second half of 2025.
Free cash flow surged to 35 billion yuan in the first half, compared with 7.9 billion yuan in the same period last year, driven by higher short-term payables and restrained capital expenditure. Chery maintained a net cash position of 72 billion yuan, equivalent to roughly 50% of its market capitalization.
The company began shipping its Luxeed V9 high-end vehicle in June, contributing to the improved product mix and margin trends. Shipments of the model are expected to accelerate in the third quarter, further supporting revenue growth.
