Shenghui Cleanness (2521) H2 2024 earnings summary

Executive summary

• FY2023 revenue rose 6.1% YoY to RMB630.2m, while gross profit slipped to RMB93.4m and reported net profit fell to RMB27.9m, reflecting listing costs and higher employee expenses.

• Excluding RMB12.0m of non-recurring listing expenses, adjusted net profit was RMB39.9m versus RMB42.248m in FY2022; listing on the Hong Kong Stock Exchange was completed on 5 December 2023.

Financial highlights

• Revenue increased 6.1% to RMB630.2m; cost of services rose 7.4% to RMB536.7m, and gross profit declined to RMB93.4m from RMB94.4m.

• Operating profit was RMB32.9m versus RMB40.3m; profit before tax was RMB32.4m versus RMB39.9m, and net profit was RMB27.9m versus RMB34.4m.

• Basic and diluted EPS were RMB2.18 cents, down from RMB2.75 cents in FY2022.

• Employee benefit expenses rose to RMB351.3m from RMB324.1m; listing expenses were RMB12.0m versus RMB7.9m.

Outlook and guidance

• Plans emphasize organic growth, replicating the operating model in PRC regions with strong property-cleaning demand, and expanding existing and new markets.

• Potential Greater Bay Area acquisitions or investments in cleaning and maintenance providers could broaden geographic reach and support bids for upcoming major infrastructure projects.

• Urbanisation, continued PRC economic growth and expected increases in new properties are identified as demand opportunities; no quantified financial guidance was given.