Jy Gas (1407) H1 2023 earnings summary

Executive summary

• H1 revenue fell 10.0% YoY to RMB204.5m; gross profit declined 27.7% to RMB31.0m, while net profit fell 19.7% to RMB19.2m.

• Profit attributable to owners fell 19.0% to RMB18.7m; weaker PNG sales and construction and installation activity weighed on results.

• Residential PNG demand partly offset temporary weakness in industrial and commercial demand; no interim dividend was declared.

Financial highlights

• Revenue was RMB204.5m, down 10.0% from RMB227.4m; gross profit was RMB31.0m, down 27.7% from RMB42.9m.

• Gross margin decreased to 15.2% from 18.9%; operating profit was RMB25.9m versus RMB34.2m, and profit before tax was RMB26.5m versus RMB33.6m.

• Profit attributable to owners was RMB18.7m, down 19.0%; basic and diluted EPS was RMB0.04 versus RMB0.07.

• Finance costs fell 50% to RMB0.5m, mainly due to lower bank borrowings; income tax expense was RMB7.3m, down 24.0% from RMB9.6m.

Outlook and guidance

• Plans include extending the Gaomi pipeline network, continuing subsidized rural Clean Energy Projects, and replacing existing meters with Goldcard wireless remote gas meters.

• Government energy plans target natural gas at no less than 9% of Shandong’s total energy consumption by 2025 and support pipeline expansion and LNG facilities.

• Intended offering proceeds fund pipelines, network upgrades, meter replacement, rural end-user connections and working capital; unused proceeds are held in an interest-bearing bank account.