Tongwei (600438) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 was RMB 43.80 billion, down 40.87% year-over-year due to sharp price declines in the photovoltaic sector.

• Net loss attributable to shareholders was RMB -3.13 billion, compared to a net profit of RMB 13.27 billion in H1 2023.

• Cash flow from operating activities dropped 95.46% year-over-year to RMB 961 million.

• Total assets increased 20.69% to RMB 198.37 billion, while net assets attributable to shareholders fell 13.33% to RMB 53.33 billion.

Financial highlights

• Gross margin and net margin both declined sharply due to industry-wide price drops and overcapacity in the PV sector.

• Basic EPS was -0.6951 yuan, down from 2.9477 yuan year-over-year.

• Non-recurring items contributed RMB 49 million to profit, mainly from government subsidies.

• Asset impairment and inventory write-downs were significant, with inventory provision at RMB 2.25 billion.

Outlook and guidance

• The company expects continued industry consolidation in PV and feed sectors, with a focus on cost control, technology upgrades, and expanding advanced N-type cell capacity.

• New polysilicon and cell projects are expected to come online by year-end, further increasing capacity and cost competitiveness.