SL Gemini Energy (2481) H2 2023 earnings summary

Executive summary

• FY2023 revenue rose 6.3% YoY to RMB1,534.0 million; gross profit increased 32.8% to RMB394.2 million and profit attributable to owners rose 54.5% to RMB149.0 million.

• Net profit for the year increased 61.6% to RMB226.8 million, supported by higher revenue, lower cost of sales, higher other income and lower finance costs.

Financial highlights

• Revenue was RMB1,534.0 million versus RMB1,443.7 million in 2022; cost of sales decreased to RMB1,139.9 million from RMB1,146.9 million.

• Operating profit was RMB298.9 million versus RMB230.5 million; profit before tax was RMB282.2 million versus RMB186.3 million.

• Other income increased to RMB73.0 million from RMB53.7 million, including compensation for heat-distribution costs incurred in prior years; finance costs fell to RMB50.4 million from RMB84.1 million.

• Administrative expenses increased 25.5% to RMB175.2 million, primarily on higher employee benefits and marketing-related business entertainment expenses.

Outlook and guidance

• 2024 priorities include growing existing concession projects, expanding market coverage, and increasing actual heat service area at the Xinmi Project.

• The Baotou Project is targeted to commence steam heat services in May 2024; continued project execution is a stated priority for 2024.

• Plans include advancing the digitalised heat-service platform and establishing a Heating Technology Center focused on carbon-neutral heating research and market-oriented new energy applications.