China Graphite Group (2237) H2 2024 earnings summary

Executive summary

• FY2024 revenue fell 29.5% YoY to RMB142.4m; gross profit declined 43.6% to RMB41.6m, with a net loss of RMB12.5m versus net profit of RMB21.3m in FY2023.

• Weaker spherical graphite demand and pricing prompted reduced production and a stronger sales focus on flake graphite concentrate.

• No final dividend was recommended for FY2024.

Financial highlights

• Cost of sales fell 21.5% to RMB100.8m, while gross margin contracted to 29.2% from 36.5%.

• Operating loss was RMB9.4m versus operating profit of RMB23.6m; net finance costs were RMB4.1m versus net finance income of RMB0.9m.

• Basic and diluted loss per share was RMB0.78 cents, versus earnings per share of RMB1.33 cents in FY2023.

• Adjusted net loss, excluding government grants, was RMB15.9m versus adjusted net profit of RMB18.7m in FY2023.

• Net cash from operating activities rose to RMB51.0m from RMB27.6m; cash and cash equivalents decreased to RMB32.5m from RMB111.9m.

Outlook and guidance

• A cautious development pace is planned amid industry volatility; expansion schedules may be adjusted to market conditions.

• An application is underway to mine Beishan resources below 150 metres above sea level; the reported resource there was 54.9m tonnes as of 30 April 2024, with a plan to raise permitted capacity above 500,000 tonnes per year.

• Construction of a new beneficiation and processing plant is progressing; Heilongjiang site formation work is underway and the Shandong site remains in design, with timing flexible to market conditions.

• Strategy includes developing higher-value natural graphite anode products while maintaining the refractory-material business.