Sany Heavy Equipment International Holdings Company (631) H1 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 was RMB10,756.1 million, down 0.8% year-over-year, mainly due to lower mining equipment sales amid a less robust coal industry.

• Net profit attributable to the parent was RMB1,032.7 million, a 14.1% decrease year-over-year.

• International sales revenue grew 17.6% year-over-year, with the international revenue share rising by 5.5 percentage points.

• The company increased R&D investment, focusing on new products and emerging industries, enhancing product competitiveness.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit margin was 24.4%, down 1.7 percentage points from 26.1% a year ago, due to a higher share of lower-margin oil & gas and emerging industry sales.

• Basic EPS was RMB0.31, down 18.4% year-over-year; diluted EPS was RMB0.28, down 15.2%.

• Operating cash flow was a net outflow of RMB152.9 million, compared to an inflow of RMB985.1 million in the prior year.

• R&D expenses rose 8.6% to RMB813.1 million, with the R&D/revenue ratio up to 7.6%.

• Finance costs increased 53.3% to RMB113.3 million due to higher borrowings.

Outlook and guidance

• Mining equipment is expected to stabilize domestically and accelerate overseas sales in the second half.

• Logistics equipment aims for breakthroughs in the US and scaled sales in Europe, with continued R&D in electric and intelligent products.

• The company will focus on delivering photovoltaic power plants and hydrogen production equipment, targeting markets with high electricity prices and power shortages.

• The company continues to invest in R&D and expand international sales, with a focus on emerging industries and new products.

• No interim dividend is planned for the period.