Shenzhen Capchem Technology (300037) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached ¥3.58 billion, up 4.35% year-over-year; net profit attributable to shareholders was ¥416 million, down 19.54% year-over-year.

• Operating cash flow was negative at -¥257 million, a significant decrease from the prior year.

• The company maintained its position as a leading supplier in battery chemicals, organic fluorine chemicals, capacitor chemicals, and semiconductor chemicals.

• The board approved a cash dividend of ¥6 per 10 shares for 2023, with no interim dividend for H1 2024.

• Major new supply agreements and overseas expansion projects were announced, supporting future growth.

Financial highlights

• H1 2024 revenue: ¥3.58 billion (+4.35% YoY); net profit: ¥416 million (-19.54% YoY); EPS: ¥0.55 basic, ¥0.50 diluted.

• Gross margin for the chemical segment: 27.88% (-3.07pp YoY); battery chemicals margin: 13.65% (-2.08pp YoY); organic fluorine margin: 62.22% (-10.17pp YoY); capacitor chemicals margin: 40.48% (+2.14pp YoY).

• Operating cash flow: -¥257 million (vs. +¥1.61 billion YoY); total assets: ¥16.58 billion (-5.93% vs. end-2023).

• R&D investment: ¥216 million (+24.98% YoY); overseas sales accounted for 25.8% of total revenue.

• EBITDA/total debt: 11.04%; interest coverage: 11.02x; asset-liability ratio: 41.38%.

Outlook and guidance

• Management expects continued growth in global lithium battery demand, with battery chemicals and high-end fluorine products as key drivers.

• Ongoing overseas expansion (notably in Europe and the US) and new long-term supply contracts are expected to boost future revenue.

• The company will focus on R&D, cost control, and operational efficiency to address margin pressure.