Shanying International (600567) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached RMB 14.25 billion, up 3.69% year-over-year, with net profit attributable to shareholders at RMB 114 million, marking a return to profitability from a loss in the prior year.

• Operating cash flow improved significantly to RMB 2.57 billion, up 233.07% year-over-year, driven by better profitability and working capital management.

• The company maintained its position as China's second-largest in both paper production and packaging, with total production capacity exceeding 8 million tons.

• Gross margin for the period was 8.69%, slightly up from 8.65% in the prior year, despite continued industry headwinds.

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

Financial highlights

• Revenue increased 3.69% year-over-year to RMB 14.25 billion, mainly due to higher sales volume in the paper segment despite lower average selling prices.

• Net profit attributable to shareholders was RMB 114 million, compared to a net loss of RMB 271 million in H1 2023.

• Excluding non-recurring items, net profit was negative RMB 108 million, a significant improvement from negative RMB 436 million last year.

• Operating cash flow reached RMB 2.57 billion, up 233.07% year-over-year.

• Basic EPS was RMB 0.03, up from negative RMB 0.06 in the prior year.

Outlook and guidance

• Management expects a gradual recovery in the paper and packaging industry in H2 2024 as macroeconomic conditions improve and raw material costs decline.

• The company will continue to focus on cost control, digital transformation, and expanding high-margin product lines.

• Ongoing capacity expansion projects, including the Suxian base, are expected to further strengthen the company’s market position.