SIIC Environment (BHK) Q2 2024 earnings summary

Executive summary

• 1HFY2024 revenue fell 17.3% YoY to RMB3,323.5m; 2Q revenue declined 19.3% to RMB1,695.4m, largely reflecting lower construction revenue.

• H1 net profit fell 14.4% YoY to RMB508.217m; profit attributable to owners declined 14.8% to RMB321.446m.

Financial highlights

• H1 gross profit was RMB1,277.4m, down 11.2% YoY; gross margin rose to 38.4% from 35.8%.

• 2Q gross profit was RMB666.2m, down 12.5% YoY; gross margin increased to 39.3% from 36.3%.

• H1 operating revenue, including operation-period interest, rose 5.9% YoY to RMB2.755bn.

• Finance expenses decreased 3.8% YoY to RMB400m.

• Net profit margin rose to 15.3% from 14.8%; EPS was RMB12.48 cents, down 14.8% YoY.

Outlook and guidance

• New major construction projects are expected to commence in H2 2024; existing projects will continue through construction, upgrading and reconstruction.

• Priorities include water treatment and resource recycling, market expansion and M&A, lean operations, technology innovation, and digital and intelligent operations.

• Plans include pursuing Southeast Asian Belt and Road opportunities, developing low-carbon technologies and water-sector digitalization, and optimizing financing channels.