Sunpower Group (5GD) Q2 2024 earnings summary

Executive summary

• Steam sales volume rose 14.4% YoY to 5.68 million tons in 1H2024, with GI recurring revenue up 3.3% YoY to RMB1,655.1 million and GI recurring EBITDA up 24.8% YoY to RMB549.5 million, reflecting strong operational growth and efficiency.

• Net profit attributable to equity holders surged 281.5% to RMB65.9 million in 2Q2024, and GI recurring PATMI increased 34.5% YoY to RMB193.9 million in 1H2024.

• The company operates 11 GI projects with exclusive concessions, focusing on recurring, high-quality income and circular economy models, and aligns with national green policies.

• Strategic institutional investors DCP and CDH invested US$130 million via convertible bonds, supporting long-term growth.

• Total comprehensive income for 1H2024 was RMB197.6 million, up 142.1% YoY.

Financial highlights

• 1H2024 revenue: RMB1,737.0 million (up 6.1% YoY); gross profit: RMB469.1 million (up 28.5% YoY); EBITDA: RMB530.0 million (up from RMB420.5 million in 1H2023); net profit (after tax): RMB251.1 million (up from RMB162.4 million in 1H2023).

• Net cash from operating activities: RMB126.6 million (1H2024); net cash used in investing: RMB106.9 million; net cash used in financing: RMB146.3 million.

• Basic EPS for 1H2024 was 15.32 RMB cents (with CB effects), up from 5.77 RMB cents in 1H2023.

• Net asset value per share as of 30 June 2024 was RMB315.49 cents (with CB effects).

• Total borrowings as of 30 June 2024: RMB3,272.1 million; convertible bonds outstanding: RMB1,015.8 million, reclassified as current.

Outlook and guidance

• Continued ramp-up of 11 GI projects, with new biomass boiler at Quanjiao Project expected online in 3Q2024 and new customer additions anticipated.

• Focus on price adjustment mechanisms, procurement optimization, technological innovation, and operational efficiency to enhance profitability.

• Management expects ongoing demand growth, improved profitability, and positive cash flows in FY2024, with less intense capital expenditure and targeted project expansion.

• Group expects favorable trends in FY2024, including declining feedstock prices and supportive government policies for green transition.