Shanxi Installation Group (2520) H2 2023 earnings summary

Executive summary

• FY2023 revenue fell 13.2% YoY to RMB11.15bn, while net profit rose 2.6% to RMB205.6m, supported mainly by lower administrative and other operating expenses.

• New contract value in chemical, municipal, electric power and electromechanical markets grew 11.07% YoY; overseas new contracts totaled RMB2.738bn.

• New-energy project milestones included 374MW of distributed and centralized wind/solar targets achieved, Bangladesh's 66MW wind project entering generation, and an 80MW Algeria solar EPC win.

Financial highlights

• Revenue was RMB11,150.2m, down 13.2% YoY; cost of sales declined 13.0% to RMB9,571.9m and gross profit fell 14.3% to RMB1,578.3m.

• Profit before tax increased 5.8% to RMB225.1m; net profit rose 2.6% to RMB205.6m, and attributable net profit was RMB154.9m versus RMB150.9m.

• Gross margin was 14.2% versus 14.3%; net profit margin was 1.8% versus 1.6%; basic and diluted EPS were both RMB0.15.

• Other income and gains rose to RMB42.5m from RMB20.8m, reflecting higher government grants and interest income.

Outlook and guidance

• Strategy targets a domestically recognized, industry-leading modern engineering services provider by the end of the 14th Five-Year Plan, emphasizing green energy, low-carbon projects and full-life-cycle services.

• Priorities include improving project profitability, resource integration, technology conversion, contract performance and refined management, alongside overseas expansion and specialized capabilities.

• Planned use of listing proceeds includes centralized and distributed solar, wind, clean heating, distributed energy, water treatment, solid-waste and service-concession projects, with stated utilization deadlines mainly through 2026.