信义能源(03868) - 2024 - 中期业绩

Performance Announcement Financial Highlights Xinyi Energy's H1 2024 performance saw core financial metrics decline across the board due to grid curtailment, market-based power trading, and RMB depreciation H1 2024 Financial Highlights | Metric | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue (HKD Million) | 1,218.4 | 1,288.6 | -5.4% | | Profit Attributable to Equity Holders (HKD Million) | 394.5 | 566.9 | -30.4% | | Basic Earnings Per Share (HK Cents) | 4.78 | 7.48 | -36.1% | | Interim Dividend Per Share (HK Cents) | 2.3 | 3.4 | -32.4% | Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss H1 2024 saw revenue decline 5.4% to HKD 1.218 billion, gross profit fall 13.5%, and finance costs rise 21.6%, resulting in a 30.4% drop in profit for the period Key Items from Condensed Consolidated Statement of Profit or Loss | Item (HKD Thousand) | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,218,405 | 1,288,554 | -5.4% | | Gross Profit | 782,456 | 904,581 | -13.5% | | Operating Profit | 765,839 | 886,017 | -13.6% | | Finance Costs | (197,716) | (162,555) | +21.6% | | Profit Before Income Tax | 570,906 | 725,737 | -21.3% | | Profit for the Period | 395,111 | 567,709 | -30.4% | | Profit Attributable to Equity Holders of the Company | 394,522 | 566,855 | -30.4% | Condensed Consolidated Statement of Comprehensive Income The company recorded a total comprehensive loss of HKD 82.32 million for the period, primarily due to significant foreign currency translation losses of HKD 477 million from RMB depreciation - The company recorded a total comprehensive loss of HKD 82.32 million, compared to a loss of HKD 78.89 million in the prior period, impacted by foreign currency translation differences[5] - Foreign currency translation differences resulted in a loss of HKD 477 million, which was the primary driver of the comprehensive loss[5] Condensed Consolidated Statement of Financial Position As of June 30, 2024, total assets slightly increased by 1.8% to HKD 21.504 billion, while total liabilities rose 8.5% to HKD 8.494 billion, and total equity decreased 2.2% to HKD 13.010 billion Statement of Financial Position Summary | Item (HKD Thousand) | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 21,504,066 | 21,133,563 | +1.8% | | Total Liabilities | 8,493,671 | 7,826,245 | +8.5% | | Total Equity | 13,010,395 | 13,307,318 | -2.2% | | Net Trade Receivables | 4,402,272 | 3,912,330 | +12.5% | | Bank Borrowings (Current + Non-current) | 6,627,975 | 6,270,466 | +5.7% | Condensed Consolidated Statement of Cash Flows H1 2024 saw net cash inflow from operating activities remain flat at HKD 170 million, while investing outflow narrowed to HKD 666 million, and financing inflow was HKD 334 million, resulting in period-end cash of HKD 472 million Cash Flow Statement Summary | Item (HKD Thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 170,380 | 175,967 | | Net Cash Used in Investing Activities | (665,620) | (1,661,824) | | Net Cash from Financing Activities | 334,001 | 490,527 | | Net Decrease in Cash and Cash Equivalents | (161,239) | (995,330) | | Cash and Cash Equivalents at End of Period | 472,140 | 780,226 | Notes to the Condensed Consolidated Financial Information Note 3: Revenue, Other Income and Segment Information Revenue primarily from electricity sales and tariff adjustments declined in H1 2024, with electricity sales down 4.0% and tariff adjustments down 7.6%, and no segment information is presented due to concentrated operations Revenue Composition (HKD Thousand) | Revenue Source | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Electricity Sales | 698,326 | 727,536 | -4.0% | | Tariff Adjustments | 513,654 | 556,134 | -7.6% | | Operation and Management Services | 6,425 | 4,884 | +31.5% | | Total | 1,218,405 | 1,288,554 | -5.4% | - The Group primarily operates and manages solar power plants in China, with a single business segment, thus no segment information is presented[17] Note 6: Financial Income and Finance Costs H1 2024 finance costs increased 21.6% to HKD 198 million, driven by a 45.3% rise in bank borrowing interest expense to HKD 174 million Finance Costs Composition (HKD Thousand) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Interest Expense on Bank Borrowings | 173,507 | 119,359 | | Interest on Lease Liabilities | 24,209 | 22,418 | | Interest Expense on Deferred Payments for Business Combination Purchase Consideration | — | 20,778 | | Total | 197,716 | 162,555 | Note 9: Dividends The Board declared an interim dividend of HKD 2.3 cents per share for H1 2024, a 32.4% decrease from the prior period, totaling approximately HKD 190 million - Proposed interim dividend of HKD 2.3 cents per share, totaling HKD 190 million[28] - The interim dividend for the same period in 2023 was HKD 3.4 cents per share[28] Note 11: Trade and Other Receivables As of June 30, 2024, total trade receivables rose to HKD 4.447 billion, with tariff adjustment receivables at HKD 4.230 billion, and 69% of receivables were over one year old, indicating prolonged government subsidy collection Trade Receivables Composition (HKD Thousand) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Electricity Sales Receivables | 216,453 | 198,549 | | Tariff Adjustment Receivables | 4,230,286 | 3,753,299 | | Total | 4,446,739 | 3,951,848 | - Trade receivables over 365 days increased from HKD 2.58 billion to HKD 3.07 billion, representing 69% of the total[32] Note 14: Bank Borrowings As of June 30, 2024, total bank borrowings increased 5.7% to HKD 6.628 billion, with non-current borrowings rising to 59.8% of the total, and the effective annual interest rate decreased to 4.71% Bank Borrowings Maturity Structure (HKD Thousand) | Maturity | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 1 year (Current) | 2,662,249 | 3,636,561 | | Over 1 year (Non-current) | 3,965,726 | 2,633,905 | | Total | 6,627,975 | 6,270,466 | - Borrowing currency composition: HKD accounts for 78.1%, and RMB for 21.9%[38][68] - The effective annual interest rate decreased from 6.05% at the beginning of the period to 4.71%[39] Management Discussion and Analysis Overview H1 2024 saw increased PV installations in China leading to grid curtailment and lower market electricity prices, resulting in revenue and profit declines of 5.4% and 30.4% respectively, despite increased installed capacity - Rapid expansion of China's PV industry led to grid curtailment and power loss for the company[47] - Participation in market-based power trading resulted in some electricity prices being lower than traditional on-grid tariffs, impacting revenue[47] - As of June 30, 2024, total approved generation capacity increased to 3,850.5 MW[47] Business Review Despite a 7.4% increase in total power generation, revenue declined 5.4% due to RMB depreciation, grid curtailment, and market-based trading, while the company acquired a 200 MW solar project and focused on grid-parity investments - Total power generation increased by 7.4% YoY, but revenue decreased by 5.4%, primarily due to RMB depreciation, power curtailment losses, and market-based trading[48] - Completed the acquisition of a 200 MW large-scale solar power plant project in Guangdong Province during the first half[49] - The company continues to invest in grid-parity projects to reduce reliance on government subsidies and improve operating cash flow[49] Financial Review Financial performance was under pressure, with revenue down 5.4%, cost of sales up 13.5% leading to a gross margin drop from 70.2% to 64.2%, and profit attributable to equity holders plummeting 30.4% due to increased finance costs Financial Performance Summary | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue (HKD Million) | 1,218.4 | 1,288.6 | | Gross Margin | 64.2% | 70.2% | | Finance Costs (HKD Million) | 197.7 | 162.6 | | EBITDA (HKD Million) | 1,128.1 | 1,208.9 | | Net Profit Margin | 32.4% | 44.0% | | Profit Attributable to Equity Holders (HKD Million) | 394.5 | 566.9 | Revenue Total revenue decreased 5.4% to HKD 1.218 billion, with electricity sales down 4.0% and tariff adjustments down 7.6%, primarily due to grid curtailment, market trading, and RMB depreciation - Electricity sales revenue decreased by 4.0% to HKD 698 million, and tariff adjustment revenue decreased by 7.6% to HKD 514 million[51] Cost of Sales and Gross Profit Cost of sales increased 13.5% to HKD 436 million due to new projects, leading to a 13.5% decline in gross profit to HKD 783 million and a gross margin drop from 70.2% to 64.2% - Cost of sales increased by 13.5%, primarily due to depreciation and maintenance expenses from new projects[54] - Gross margin decreased from 70.2% in the prior period to 64.2%[55] Finance Costs Total finance costs increased 21.5% from HKD 163 million to HKD 198 million, primarily driven by a 45.3% rise in bank borrowing interest expense to HKD 174 million - Interest expense on bank borrowings significantly increased from HKD 119 million to HKD 174 million, primarily due to an increase in interest-bearing bank borrowing balances[59] EBITDA and Net Profit EBITDA decreased 6.7% to HKD 1.128 billion, and profit attributable to equity holders significantly declined 30.4% to HKD 395 million, with net profit margin falling from 44.0% to 32.4% - EBITDA was HKD 1.128 billion, a 6.7% YoY decrease[61] - Profit attributable to equity holders was HKD 395 million, a 30.4% YoY decrease[61] Liquidity and Financial Resources The company's financial position remained stable with an improved current ratio of 1.5, but the net debt-to-equity ratio increased to 47.3% due to decreased cash and increased bank borrowings - Current ratio improved from 1.2 to 1.5[62] - Net debt-to-equity ratio increased from 42.3% at the beginning of the period to 47.3%[62] - Cash and cash equivalents at period-end were HKD 472 million[62] Business Outlook The company anticipates improved grid curtailment due to national policies, plans to acquire 790 MW of solar projects in Q3 2024, and will optimize its debt structure by increasing lower-cost domestic RMB loans and replacing short-term with long-term debt - National policies support new energy absorption, expecting power curtailment losses to gradually decrease[63] - Plans to acquire eight large-scale solar power plant projects with a total capacity of 790 MW, expected to commence in Q3 2024[63] - The company will increase domestic bank borrowings to reduce financing costs and conduct long-term for short-term debt swaps to optimize its financial structure[64] Other Company Information Interim Dividend The Board declared an interim dividend of HKD 2.3 cents per share for 2024, with a scrip dividend option, payable on October 16, 2024 - Declared an interim dividend of HKD 2.3 cents per share, a 32.4% YoY decrease[71] - Shareholders have the option to receive dividends in cash or new shares[71] Corporate Governance and Compliance The company confirmed compliance with HKEX Corporate Governance Code and Model Code for securities transactions in H1 2024, with interim results reviewed by the Audit Committee but not externally audited - The company complied with the Listing Rules' Corporate Governance Code and the Model Code for securities transactions by directors[72][73] - The interim results were reviewed by the company's Audit Committee but not by external auditors[74]