Zhongtian Construction (2433) H1 2024 earnings summary

Executive summary

• H1 revenue fell 47.7% YoY to RMB356.5m amid weaker construction demand; gross profit declined and results swung to a RMB22.7m net loss.

• Other specialised contracting grew strongly, but did not offset lower revenue in civil building, municipal works and steel structure construction.

Financial highlights

• Revenue was RMB356.5m, down 47.7% YoY; cost of sales fell 47.2% to RMB317.8m.

• Gross profit declined to RMB38.7m from RMB79.5m; gross margin contracted to 10.9% from 11.7%.

• Net loss was RMB22.7m versus net profit of RMB19.0m in 1H2023; loss attributable to owners was RMB21.6m.

• Basic and diluted loss per share was RMB4.23 cents, versus earnings per share of RMB4.27 cents in 1H2023.

Outlook and guidance

• The PRC construction industry is expected to face significant challenges in 2024, with competition for limited new projects and liquidity preservation priorities.

• Priorities include adjusting customer mix, project portfolio and cost structure, while closely managing cash flow to support long-term stability.