Fuxing China Group (AWK) H2 2024 earnings summary

Executive summary

• FY2024 returned to profit after tax of RMB0.9m from a RMB10.7m loss in FY2023, while revenue declined RMB25.9m to RMB735.9m.

• Operating cash flow rose to RMB68.3m from RMB20.1m, supporting a stronger cash position at year-end.

Financial highlights

• Revenue was RMB735.9m versus RMB761.8m; gross profit rose RMB0.2m to RMB45.8m and gross margin improved 0.2 percentage points to 6.2%.

• Profit before tax was RMB3.3m versus a RMB7.6m loss; profit for the year was RMB0.9m versus a RMB10.7m loss.

• Other income increased to RMB38.9m from RMB18.3m, including net reversals of trade-receivable and supplier-advance allowances of RMB10.6m and RMB2.7m, plus RMB3.0m of forfeited customer advances.

• Administrative expenses rose RMB13.2m to RMB60.5m, including RMB15.3m for a sewerage engineering project; net financial costs fell RMB1.7m to RMB8.8m as bank loan rates declined.

• Basic and diluted EPS was RMB0.04 versus a loss per share of RMB0.64.

Outlook and guidance

• Business conditions expected to remain highly challenging and competitive, with high production costs, razor-thin gross margins and uncertain customer demand amid subdued China growth.

• Sales outreach, expense control, and close monitoring of receivables and collections remain priorities to support sales and limit bad debts.

• FY2025 sustainability targets: reduce total GHG emissions 5% and energy consumption 3% versus FY2024; cut water use 5% over three years and waste generation 3% over five years.