Huaibei GreenGold Industry Investment (2450) H1 2023 earnings summary

Executive summary

• H1 revenue fell 26.0% to RMB151.538m and profit attributable to shareholders fell 44.1% to RMB16.429m amid weaker demand and lower aggregate and concrete prices.

• Sales development included a 1m-tonne annual aggregate supply agreement, expansion into Bengbu and an August tender win for estimated procurement of 2m tonnes in 2023–2024.

Financial highlights

• Revenue was RMB151.538m versus RMB204.783m; gross profit was RMB67.912m versus RMB98.401m, and operating profit was RMB64.044m versus RMB96.024m.

• Profit before tax was RMB30.912m versus RMB58.990m; period profit was RMB23.666m versus RMB44.490m; shareholder-attributable profit was RMB16.429m versus RMB29.413m.

• Cost of sales fell to RMB83.626m from RMB106.382m; administrative expenses rose to RMB15.998m from RMB13.943m, mainly due to higher third-party service fees.

• Finance costs declined to RMB33.132m from RMB37.034m, primarily due to lower loan principal; income tax expense was RMB7.246m versus RMB14.500m.

Outlook and guidance

• Phase II trial production at the 8.0m-tonne-per-year plant was expected in October 2023; annual output is planned to rise from 3.5m tonnes to 8m tonnes by 2031.

• H2 priorities include increasing aggregate production, promoting aggregate and concrete sales, and maintaining stable production while improving quality and efficiency.

• The tender win is estimated to involve 2m tonnes of aggregate; longer-term demand may benefit from policy support, though its impact remains uncertain.