Yangtze Optical Fibre And Cable (6869) H2 2024 earnings summary

Executive summary

• Operating income for 2024 was RMB12,197.4 million, down 8.7% year-over-year, with gross profit rising 1.8% to RMB3,330.1 million and gross margin improving to 27.3% from 24.5% in 2023.

• Net profit attributable to equity shareholders fell 47.9% to RMB675.9 million, with basic EPS at RMB0.89, compared to RMB1.71 in 2023.

• Domestic revenue declined 10.4% and overseas revenue decreased 5.1%, with overseas business now representing 33.8% of total revenue.

Financial highlights

• Cost of sales dropped 12% to RMB8,867.3 million, while selling and distribution, and administrative expenses decreased slightly.

• Financial expenses rose 50.1% to RMB191.2 million due to higher interest and lower exchange gains.

• Other income increased to RMB261.3 million, mainly from higher government grants.

• Net cash from operating activities rose 17.8% to RMB1,783 million; net cash used in investing activities decreased.

• Gearing ratio increased to 41.4% from 31.6% year-over-year.

Outlook and guidance

• The company expects global optical fibre and cable demand to recover in 2025, with a projected stable annual growth rate of 4% from 2025 to 2029.

• Domestic 5G and fixed network infrastructure expansion, as well as overseas network coverage improvements, are anticipated to drive future growth.

• Focus remains on technology innovation, internationalization, and diversification into semiconductors, lasers, and marine engineering.