SEP(SH:600021) Zheng Quan Zhi Xing·2025-08-29 22:41Core Viewpoint - Shanghai Electric (600021) reported a solid performance in its 2025 interim financial results, with notable increases in revenue and net profit, despite rising short-term debt pressure [1]. Financial Performance - Total revenue for the first half of 2025 reached 20.475 billion yuan, a year-on-year increase of 1.76% [1]. - Net profit attributable to shareholders was 1.909 billion yuan, up 43.85% year-on-year [1]. - In Q2 2025, total revenue was 10.032 billion yuan, reflecting a 5.45% increase compared to the same quarter last year [1]. - Q2 net profit attributable to shareholders was 1.08 billion yuan, showing a significant rise of 55.8% year-on-year [1]. - Gross margin improved to 28.26%, up 7.79% year-on-year, while net margin increased to 16.49%, a rise of 27.12% [1]. Cost and Efficiency Metrics - Total selling, administrative, and financial expenses amounted to 2.278 billion yuan, accounting for 11.12% of revenue, a decrease of 15.25% year-on-year [1]. - Earnings per share (EPS) increased to 0.62 yuan, a 49.59% rise compared to the previous year [1]. - Operating cash flow per share reached 2.18 yuan, up 41.59% year-on-year [1]. Balance Sheet and Debt Analysis - The current ratio stood at 0.68, indicating rising short-term debt pressure [1]. - Cash and cash equivalents increased to 9.648 billion yuan, a 15.54% increase year-on-year [1]. - Interest-bearing liabilities rose to 112.849 billion yuan, an 18.81% increase from the previous year [1]. Historical Performance and Business Model - The company's historical return on invested capital (ROIC) was 4.83%, indicating weak capital returns [3]. - The average ROIC over the past decade was 5.21%, with a notably low ROIC of 1.27% in 2021 [3]. - The business model relies heavily on capital expenditures, necessitating careful evaluation of capital projects and their financial viability [3]. Cash Flow and Debt Concerns - The cash flow situation is concerning, with cash and cash equivalents to current liabilities ratio at 16.99% [4]. - The interest-bearing debt ratio reached 51.82%, indicating significant leverage [4]. - Accounts receivable to profit ratio was alarmingly high at 1398.61%, suggesting potential collection issues [4]. Analyst Expectations - Analysts project the company's performance for 2025 to reach a net profit of 3.32 billion yuan, with an average EPS forecast of 1.14 yuan [5].