Hengtong Optic-Electric (600487) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached RMB 26.61 billion, up 14.83% year-over-year, driven by growth in power grid, new energy, and marine communications sectors.

• Net profit attributable to shareholders was RMB 1.61 billion, up 28.80% year-over-year; adjusted net profit (excluding non-recurring items) was RMB 1.52 billion, up 25.82%.

• Gross margin and profitability improved due to enhanced cost control, R&D investment, and product mix optimization.

• The company continued global expansion, completed strategic investments, and furthered its transformation into a global information and energy interconnection solutions provider.

• No interim dividend or capital increase from reserves was proposed for the period.

Financial highlights

• Operating income: RMB 26.61 billion, up 14.83% year-over-year.

• Net profit attributable to shareholders: RMB 1.61 billion, up 28.80% year-over-year.

• Adjusted net profit (excluding non-recurring items): RMB 1.52 billion, up 25.82% year-over-year.

• Basic and diluted EPS: RMB 0.65, up 27.45% year-over-year.

• Net cash flow from operating activities: RMB 2.67 million, a significant turnaround from negative RMB 823.66 million in H1 2023.

Outlook and guidance

• The company expects continued growth in optical communications, power grid, new energy, and marine sectors, leveraging national policies such as "New Infrastructure" and "Dual Carbon".

• Ongoing investment in R&D and global capacity expansion to support long-term competitiveness.

• Management remains cautious of macroeconomic and policy uncertainties but is optimistic about medium- and long-term industry trends.