China Qinfa Group (866) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 was RMB1,373.3 million, down 27.9% year-over-year, mainly due to lower coal prices and reduced trading volume.

• Gross profit margin improved to 23.1% from 20.5% despite lower revenue, mainly due to reduced cost of sales.

• Profit attributable to equity shareholders fell to RMB43.0 million from RMB130.8 million, reflecting lower coal prices and significant foreign exchange losses.

• Operating profit dropped 43.6% to RMB146.2 million, and profit after tax fell 56.6% to RMB60.8 million.

• No interim dividend was declared for the period.

Financial highlights

• Revenue: RMB1,373.3 million (2023: RMB1,905.9 million), down 27.9% year-over-year.

• Gross profit: RMB317.3 million (2023: RMB390.1 million); gross margin: 23.1% (2023: 20.5%).

• Operating profit: RMB146.2 million (2023: RMB259.3 million), down 43.6%.

• Profit after tax: RMB60.8 million (2023: RMB140.1 million), down 56.6%.

• Basic and diluted EPS: RMB1.62 cents (2023: RMB5.14 and RMB5.01 cents, respectively).

Outlook and guidance

• Domestic coal supply remains high with increased imports, putting downward pressure on prices.

• Coal demand may rise during seasonal peaks, but green energy adoption could reduce coal-fired generation.

• The Group will focus on stable production, green transformation, and further development of Indonesian mines, especially the SDE project.

• Expansion plans include development of three newly acquired Indonesian mines.

• No interim dividend is proposed for the period.