Shenzhen Hopewind Electric (603063) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue was RMB1.382bn, down 10.34% YoY; attributable net income was RMB154.8m, down 23.64% YoY, while adjusted net income declined 4.29%.

• Domestic revenue weakened, but overseas revenue grew 49.77%; overall gross margin increased 7.23 percentage points to 38.11%.

Financial highlights

• Operating cash flow was negative RMB96.1m, versus positive RMB80.7m in H1 2023; the decrease was attributed mainly to higher cash paid to employees.

• R&D expense rose 32.28% YoY to RMB161.2m; sales expense increased 27.97% to RMB136.0m, and management expense rose 5.09% to RMB68.2m.

• Reported operating costs declined 19.10% YoY to RMB849.0m, alongside the revenue decrease; the gross margin improvement was 7.23 percentage points.

Segment performance

• New energy electric-control revenue was RMB1.051bn, down 12.15% YoY; gross margin was 35.69%, up 8.04 percentage points.

• Engineering transmission revenue was RMB202.7m, down 5.07% YoY; gross margin was 39.45%, down 5.51 percentage points.

• Domestic revenue was RMB1.265bn, down 12.85% YoY, with a 37.37% gross margin; overseas revenue was RMB95.6m, up 49.77%, with a 47.83% gross margin.