China Hongqiao Group (1378) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 rose 12.0% year-over-year to RMB73.6 billion, with net profit attributable to shareholders surging 272.7% to RMB9.15 billion and basic EPS at RMB0.966, up from RMB0.259.

• Gross profit increased 202.1% to RMB17.8 billion, with gross margin expanding to 24.2% from 9.0% a year earlier, driven by higher sales prices and volumes for aluminum alloy and alumina products, and lower raw material costs.

• Interim dividend of HK59.0 cents per share declared, up from HK34.0 cents in 2023.

• The Group advanced green and low-carbon initiatives, expanded R&D, and strengthened its integrated industrial chain, especially in high-end and lightweight aluminum applications.

Financial highlights

• Revenue: RMB73.6 billion (+12.0% YoY); net profit: RMB9.15 billion (+272.7% YoY); gross profit: RMB17.8 billion (+202.1% YoY).

• Gross profit margin: 24.2% (+15.2 p.p. YoY); net profit margin: 13.6% (+9.1 p.p. YoY).

• Basic EPS: RMB0.966 (+273.0% YoY); cash and cash equivalents: RMB37.5 billion as of 30 June 2024 (+18.2% vs. 31 Dec 2023).

• Gearing ratio: 48.5% (up from 47.0% at end-2023); total assets: RMB213.71 billion; net current assets: RMB20.5 billion.

• EBITDA margin improved to 28.1% from 13.5% YoY; interest coverage ratio at 13.23x (up from 6.02x YoY).

Outlook and guidance

• Management expects continued stable and positive economic development in China, with ongoing volatility in global markets and commodity prices.

• The Group will focus on high-quality, green, and innovative growth, further integrating the industrial, innovation, and talent chains.

• Plans to further integrate upstream and downstream sectors and expand green transformation.

• Will continue to optimize capital structure and diversify financing channels.

• Targets carbon peak before 2025 and net-zero emissions before 2055.