Sunpower Group (5GD) Q3 2024 earnings summary

Executive summary

• Steam sales volume increased 10.2% YoY to 8.21 million tons in 9M2024, driven by ramp-up of Green Investment (GI) projects, with recurring revenue up 1.3% YoY to RMB2,404.5 million.

• GI recurring PATMI excluding a one-off bad debt provision grew 6.1% YoY to RMB270.3 million; including the provision, PATMI was RMB190.2 million, down 25.4% YoY.

• Net loss attributable to equity holders in Q3 2024 was RMB21.5 million, mainly due to a one-off provision for bad debts on biomass subsidy receivables; excluding the provision, net profit would have been RMB58.6 million.

• Operating cash flow from GI business increased 48.7% YoY to RMB283.6 million.

• Sunpower is recognized for ESG leadership, winning multiple awards for green and low-carbon development.

Financial highlights

• 9M2024 revenue: RMB2,486.3 million (up 3.2% YoY); Q3 2024 revenue: RMB749.3 million (down 2.9% YoY).

• 9M2024 gross profit: RMB658.0 million (up 8.8% YoY); Q3 2024 gross profit: RMB188.9 million (down 21.3% YoY).

• 9M2024 net profit: RMB100.4 million (down 23.3% YoY); Q3 2024 net loss: RMB21.5 million (vs. profit of RMB84.9 million YoY).

• Net cash from operating activities: RMB234.3 million (9M2024), up from RMB140.8 million (9M2023); Q3 2024: RMB107.7 million.

• Net asset value per share as of 30 September 2024: RMB315.14 (up from RMB290.65 at end-2023).

Outlook and guidance

• Continued ramp-up of existing GI plants, completion of new projects, and refined management expected to drive growth and profitability in FY2024.

• Focus on optimizing feedstock procurement, price adjustment mechanisms, and operational efficiency.

• Convertible Bonds mature in April 2025; management is actively exploring refinancing options, including new investors, equity/debt fundraising, strategic review, and asset monetization.

• Emphasis on less capital-intensive expansion and expanding customer base.