HEGC(SZ:000883) Zheng Quan Zhi Xing·2025-08-29 22:41Core Insights - Hubei Energy reported a decline in total revenue and net profit for the first half of 2025, with total revenue at 8.493 billion yuan, down 13.52% year-on-year, and net profit at 956 million yuan, down 32.91% [1] - The company's gross margin decreased to 23.76%, a drop of 18.3% year-on-year, while the net margin fell to 12.68%, down 24.48% year-on-year [1] - The company has significant accounts receivable, with accounts receivable accounting for 278.47% of the latest annual net profit [1] Financial Performance - In Q2 2025, total revenue was 4.31 billion yuan, a decrease of 6.61% year-on-year, and net profit was 600 million yuan, down 7.08% year-on-year [1] - The total of selling, administrative, and financial expenses reached 819 million yuan, accounting for 9.64% of revenue, an increase of 19.25% year-on-year [1] - Earnings per share decreased to 0.15 yuan, down 31.82% year-on-year, while operating cash flow per share was 0.42 yuan, a decrease of 27.96% year-on-year [1] Business Evaluation - The company's return on invested capital (ROIC) was 3.84%, indicating weak capital returns, with a historical median ROIC of 5.43% over the past decade [2] - The net profit margin for the previous year was 11.08%, suggesting average value addition from products or services [2] - The company relies heavily on capital expenditures, necessitating careful evaluation of capital projects and their financial viability [2] Cash Flow and Debt Situation - The cash flow situation is concerning, with cash and cash equivalents to current liabilities ratio at only 19.16% [2] - The interest-bearing debt ratio has reached 46.12%, indicating a significant level of debt [2] - Accounts receivable to profit ratio stands at 278.47%, highlighting potential liquidity issues [2] Fund Holdings - The largest fund holding Hubei Energy is the Jiashi Zhi'an 3-Month Regular Bond Fund, which holds 5 million shares and has recently entered the top ten holdings [3] - The fund's current scale is 6.908 billion yuan, with a recent net value increase of 0.05% [3] Strategic Initiatives - The company is enhancing collaboration with meteorological departments to improve water resource management and efficiency in hydropower utilization [3] - It is also focusing on better coal procurement strategies to mitigate the impact of coal price fluctuations [3] - The company plans to maintain its investment decision-making processes for renewable energy projects without immediate adjustments, despite increasing competition [4]