Yangtze Optical Fibre And Cable (6869) H1 2024 earnings summary

Executive summary

• Revenue for the first half of 2024 was RMB5,348.1 million, down 22.7% year-over-year, with gross profit at RMB1,492.1 million, down 17.3%.

• Net profit attributable to shareholders was RMB377.7 million, a 37.8% decrease year-over-year; basic EPS was RMB0.50, down from RMB0.80.

• Gross profit margin improved to 27.9% from 26.1% in 2023, driven by production efficiency and product mix optimization.

• Domestic revenue declined 20.0% and overseas revenue dropped 27.6% year-over-year.

• No interim dividend was declared for the period.

Financial highlights

• Cost of sales decreased 24.6% to RMB3,856.0 million, accounting for 72.1% of revenue.

• Financial expenses surged 305% to RMB88.2 million, mainly due to higher exchange losses.

• Non-operating income rose sharply to RMB199.9 million, driven by a RMB194.3 million gain from acquisitions.

• Net cash from operating activities: RMB213.6 million (2023: RMB344.0 million).

• Gearing ratio: 40.0% (2023: 31.6%).

Outlook and guidance

• Domestic telecom industry remains robust with continued 5G and broadband expansion.

• International demand for optical fibre and cable is under short-term pressure but expected to grow mid- to long-term.

• Focus remains on high-end optical fibre, data center products, and R&D for next-generation technologies.