Leader Environmental Technologies (LS9) H1 2024 earnings summary

Executive summary

• H1 2024 revenue rose 56.1% YoY to RMB8.52m, with gross profit increasing to RMB4.04m; net loss narrowed 44.2% to RMB14.00m.

• Higher AlWater operations and maintenance revenue and improved O&M project margins drove growth; higher payroll and convertible-bond interest costs weighed on results.

Financial highlights

• Revenue was RMB8.52m versus RMB5.46m YoY; cost of sales fell 14.0% to RMB4.48m and gross profit reached RMB4.04m.

• Loss before tax was RMB13.98m versus RMB25.08m; net loss was RMB14.00m versus RMB25.08m.

• Finance income rose to RMB1.18m, while finance costs increased to RMB6.93m; a RMB15.16m fair-value gain on embedded CB derivatives materially supported the result.

• Basic loss per share improved to RMB0.73 cents from RMB1.44 cents; diluted loss per share was RMB1.16 cents, reflecting CB conversion adjustments.

Outlook and guidance

• 11 new AlWater projects secured in H1 with 1.0m tonnes/day capacity; total portfolio reached 26 projects and ~2.5m tonnes/day capacity.

• Singapore sludge-treatment demonstration plant is being commissioned, using CTH and pyrolysis to target zero-waste discharge and resource recovery.

• CTH and pyrolysis technologies are positioned for potential demand in China and ASEAN; China has >4,500 municipal sewage plants generating >60m tonnes of sludge annually.