Arctech Solar (688408) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached RMB 3.38 billion, up 75.73% year-over-year, with net profit attributable to shareholders at RMB 231 million, up 135.86% year-over-year.

• Overseas business drove growth, with overseas project revenue at RMB 2.72 billion and domestic at RMB 551 million.

• Gross margin for the support system business improved to 19.75%, with tracking support gross margin at 20.57%.

• R&D investment increased 14.73% year-over-year, with new product launches including the “Tian Rou” flexible tracking system and intelligent cleaning robots.

• The company maintained a leading global market share in PV tracker shipments, ranking fifth worldwide and first among Chinese companies.

Financial highlights

• Operating income: RMB 3.38 billion, up 75.73% year-over-year.

• Net profit attributable to shareholders: RMB 231 million, up 135.86% year-over-year.

• Basic and diluted EPS: RMB 1.72, up from RMB 0.73 year-over-year.

• Operating cash flow: -RMB 1.22 billion, mainly due to inventory buildup and bill payments for H2 orders.

• Gross margin: 19.75% (tracking support: 20.57%, fixed support: 14.15%), up 3.35 percentage points year-over-year.

• R&D expenses: RMB 76 million, up 14.73% year-over-year.

Outlook and guidance

• The company expects continued strong demand in global PV markets, especially in emerging regions such as the Middle East, India, and Latin America.

• Domestic tracking support market is expected to expand as large-scale wind and solar projects accelerate.

• The company is expanding overseas production capacity, with a new 3GW plant in Saudi Arabia to support local and regional deliveries.