Buyang International (2457) H1 2024 earnings summary

Executive summary

• H1 revenue rose 17.07% YoY to RMB189.315m, while profit for the period fell 25.38% to RMB12.447m as gross margin narrowed and other revenue declined.

• Sold 506.8k aluminum alloy wheels, including 346.5k overseas; overseas markets generated 71% of revenue.

• Developed 137 new products; higher raw material prices and R&D costs pressured profitability.

Financial highlights

• Revenue was RMB189.315m; gross profit RMB26.912m; operating profit RMB12.238m; profit before tax RMB14.782m; net profit RMB12.447m.

• Cost of sales rose 18.71% YoY to RMB162.403m, outpacing revenue growth; gross profit rose 8.07% to RMB26.912m and gross margin fell to 14.22% from 15.40%.

• Other revenue fell to RMB1.190m from RMB5.630m, as H1 2023 included a one-off RMB5.0m government listing subsidy.

• Operating cash flow was a RMB2.7m outflow, versus RMB4.9m in H1 2023; cash and cash equivalents were RMB153.1m at June-end.

• Basic and diluted EPS were RMB0.012, versus RMB0.017 in H1 2023; net profit margin declined to 6.57% from 10.32%.

Outlook and guidance

• H2 priorities: enter new markets, acquire new customers and maintain proactive communication with existing customers.

• Management expressed optimism about growth while noting industry uncertainty and a competitive business environment.

• Capacity expansion, new manufacturing facilities and mould development remain planned uses of offering proceeds, with utilization timelines through November or December 2024.