Skyworth Group (751) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 was RMB30,153 million, down 6.6% year-over-year, mainly due to declines in the mainland China market and new energy business, while overseas revenue grew 4.3%.

• Net profit increased 15.9% to RMB714 million, with profit attributable to owners up 27.2% to RMB384 million.

• Gross profit margin improved to 14.2% from 13.0% year-over-year, driven by a focus on own brands and high-end products.

• Basic and diluted EPS rose 36.5% year-over-year to RMB16.31 cents.

• No interim dividend was declared; focus remains on future development and potential share buy-backs.

Financial highlights

• EBIT increased 11.4% to RMB1,222 million; EBITDA rose 8.5% to RMB1,532 million year-over-year.

• Cash position stood at RMB12,252 million as of June 30, 2024, down 8.6% year-over-year.

• Net current assets were RMB11,758 million as of 30 June 2024.

• Debt to equity ratio increased to 84.2% from 67.3% at year-end 2023.

• Net cash used in operating activities was RMB2,558 million, compared to net cash from operations of RMB656 million in the prior year.

Outlook and guidance

• Management remains cautiously optimistic, focusing on high-margin, high-value products, technological innovation, and AI integration.

• Strategic initiatives include integration of 5G, AI, and device technologies, and expansion of smart appliances, photovoltaics, and energy storage overseas.

• Continued expansion in overseas markets and new energy business, with emphasis on green and low-carbon solutions.

• The group aims to enhance operational efficiency, brand competitiveness, and global supply chain management.