Hainan Drinda New Energy Technology (002865) H1 2024 earnings summary

Executive summary

• H1 revenue fell 32.35% YoY to RMB6.374bn amid lower photovoltaic industry prices and intensified supply-side competition; attributable net loss was RMB166.3m.

• Battery shipments rose 68.51% YoY to 19.21GW; N-type products were 85.5% of shipments, and overseas sales share increased to 13.79%.

• Production capacity was fully converted to next-generation N-type cells, at approximately 40GW as of June 2024.

Financial highlights

• Revenue was RMB6.374bn, down 32.35% YoY; operating costs were RMB6.308bn, down 19.21% YoY.

• Attributable net loss was RMB166.3m versus net profit of RMB955.5m in H1 2023; loss excluding non-recurring items was RMB390.3m versus profit of RMB933.0m.

• Non-recurring gains totaled RMB224.0m after tax; the non-recurring items included RMB263.0m of government subsidies and RMB5.1m of investment gains.

• Operating cash flow was RMB550.3m versus an outflow of RMB246.8m in H1 2023; investing cash flow was negative RMB248.8m and financing cash flow negative RMB1.015bn.

Outlook and guidance

• Proposed Oman investment for 5GW of high-efficiency N-type cell capacity, with production targeted to begin in 2025.

• H-share listing preparations advanced: an overseas listing application was submitted to the Hong Kong Stock Exchange and received CSRC filing approval in May 2024.

• Management identified N-type capacity and technology advantages as potential support for above-market profitability if industry supply-demand conditions improve.