Zhonggan Communication (Group) Holdings (2545) H1 2025 earnings summary

Executive summary

• H1 contract awards totaled RMB360m, up 133% YoY; revenue was RMB159.689m and net profit RMB4.195m, both lower YoY.

• Lower revenue reflected completion of sizeable infrastructure projects, fewer orders on newly awarded projects and reduced software solution work; operating cash outflow was RMB227.1m.

Financial highlights

• Revenue was RMB159.689m versus RMB237.283m; gross profit was RMB26.204m versus RMB51.332m; net profit was RMB4.195m versus RMB18.590m.

• Operating profit was RMB13.391m versus RMB25.917m; finance costs rose to RMB9.046m from RMB7.683m; tax expense was RMB0.150m versus a RMB0.356m tax credit.

• Other net income increased to RMB7.176m from RMB2.381m, mainly reflecting government grants of RMB6.349m versus RMB1.489m.

• Administrative expenses fell to RMB15.521m from RMB20.540m and R&D expenses to RMB2.797m from RMB5.932m; selling expenses rose to RMB1.671m from RMB1.324m.

Outlook and guidance

• Plans include expanding telecommunications infrastructure services nationwide and beyond Jiangxi, and exploring new infrastructure businesses and business models.

• Digitalisation priorities include pursuing information technology and AI-related opportunities domestically and internationally.

• Operating priorities include cost and cash-flow controls, refined management, capital-structure adjustment and optimised asset allocation.