Honglu Steel Structure Smart Manufacturing Raises Efficiency While Profit Recovery Takes Time
HEFEI, CHINA - May 5, 2026 - Honglu Steel Structure’s intelligent manufacturing transition has moved into a stage of higher capacity utilization and improved production efficiency, though full profit recovery is still expected to take time.
Economic Observer Online reported that the company is working through a transition period as automation investment, lower steel prices, and short-term cost pressure affect margins. Analysts remain focused on whether these investments can support long-term earnings quality.
Automation Supports Higher Utilization
Honglu’s steel-structure capacity utilization reached 96.6% in 2025, up 9.8 percentage points year on year. In the first quarter of 2026, output reached 1.204 million tonnes, up 14.8%, exceeding the growth rate of newly signed contract value.
The company has deployed self-developed intelligent equipment at scale, including welding robots. By the end of 2025, its ten major production bases had put about 3,000 welding robot workstations into operation, and the company had begun limited external sales of related equipment.
Key Transition Metrics
- 2025 Profit Pressure: Net profit attributable to shareholders fell 18.27% in 2025, while gross profit per tonne in the steel-structure business declined 13%.
- First-Quarter Margin: Gross margin was reported at 9.9% in the first quarter of 2026, while net margin was 2.8%, both broadly flat year on year.
- Future Drivers: Higher utilization, more high-end orders, and raw-material price trends will be important factors in determining margin recovery.
What Investors Are Watching
Brokerage views cited by Economic Observer Online suggest that the benefits of smart manufacturing may be released gradually. Investors will be watching whether Honglu can use automation, large-scale production, and orders from higher-end fields such as new energy and data centers to improve cost absorption, product mix, and long-term profitability.