Shenghui Cleanness (2521) H1 2024 earnings summary

Executive summary

• H1 revenue rose 9.2% YoY to RMB325.8m, while net profit fell to RMB10.2m from RMB15.3m as higher employee costs compressed margins.

• Property cleaning project growth supported revenue, but service costs grew faster than sales; gross margin declined to 9.8% from 15.8%.

Financial highlights

• Revenue was RMB325.8m vs RMB298.3m YoY; cost of services rose 17.0% to RMB293.7m.

• Gross profit fell to RMB32.0m from RMB47.2m; operating profit was RMB11.5m vs RMB17.6m.

• Net profit was RMB10.2m vs RMB15.3m; net margin declined to 3.1% from 5.1%.

• EPS was RMB0.62 cents vs RMB1.22 cents; reported impairment losses on financial assets were RMB5.0m.

• G&A fell 24.1% to RMB18.3m, mainly due to lower listing expenses; selling and marketing expenses rose 29.6% to RMB3.5m.

Outlook and guidance

• Growth plans include organic expansion and replicating the service model in PRC regions with strong property-cleaning demand.

• Potential acquisitions or investments in Greater Bay Area cleaning and maintenance providers may expand geographic reach and support bids for major infrastructure contracts.