CIMC Enric (3899) H1 2024 earnings summary

Executive summary

• Revenue increased 6.7% year-over-year to RMB11.48 billion, driven by a 25.1% surge in clean energy and 14.7% growth in liquid food, while chemical and environmental segment revenue declined 47.1%.

• Net profit attributable to shareholders decreased by 14.5% year-over-year to RMB486.1 million, with basic EPS down 14.8% to RMB0.241.

• Gross profit margin declined to 14.3% from 16.5% in the prior year, mainly due to margin compression in chemical and environmental and liquid food segments.

• Newly signed orders reached RMB16.4 billion, up 29.5% year-over-year, and backlog orders hit a record RMB29.4 billion, up 42.5%.

• Clean energy and hydrogen businesses led growth, with hydrogen revenue up 65.2% to RMB450 million.

Financial highlights

• Clean energy revenue accounted for 68.6% of total revenue, up from 58.5% in 1H2023; hydrogen business revenue up 65.2%.

• Liquid food segment revenue increased 14.7% year-over-year to RMB2.31 billion, accounting for 20.1% of total revenue.

• Chemical & environmental segment revenue declined 47.1% to RMB1.30 billion, now 11.3% of total revenue.

• Overseas revenue made up 45.8% of total, with China at 54.2%.

• Cash and cash equivalents rose to RMB7.25 billion as of June 30, 2024.

Outlook and guidance

• Strategy focuses on expanding from equipment and engineering to comprehensive service provision, leveraging digitalization and smart technologies.

• Plans to rapidly replicate the COG to hydrogen and LNG co-production model, targeting hydrogen production capacity of 200,000 tons and LNG of 1 million tons by 2027.

• Anticipates continued strong demand for LNG-powered vessels and green methanol solutions, supported by policy incentives and global decarbonization trends.

• Hydrogen energy business positioned for growth as national policies support industry expansion and infrastructure build-out.

• Liquid food segment to focus on carbon-neutral transformation and expansion in pharmaceutical and high-growth regions.