Guangdong HEC Technology Holding (600673) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached RMB 6.01 billion, up 16.15% year-over-year, driven by strong growth in third-generation refrigerants and high-end aluminum foil sales.

• Net profit attributable to shareholders was RMB 226 million, reversing a loss of RMB 139 million in H1 2023.

• Operating cash flow increased 56.32% year-over-year to RMB 326 million, supported by improved sales collection and tax rebates.

• The company continued to invest in R&D and capacity expansion across electronic components, high-end aluminum foil, chemical new materials, and energy materials.

Financial highlights

• Gross margin improved in chemical new materials (up 11.75 percentage points) but declined in energy materials (down 42.41 percentage points).

• Basic and diluted EPS were RMB 0.076, compared to -0.046 in H1 2023.

• Weighted average ROE was 2.28%, up 3.66 percentage points year-over-year.

• Non-recurring gains totaled RMB 45.08 million, mainly from government grants and fair value changes.

Outlook and guidance

• The company expects continued growth in third-generation refrigerants due to quota controls and rising downstream demand.

• Ongoing expansion in high-end aluminum foil and electronic components is anticipated to drive future profitability.

• Strategic investments in lithium resources and new energy materials are expected to enhance long-term competitiveness.