14 Aug 2023

SIIC’s 1H23 revenue increased by 9.0% YoY to Rmb4.02bn, mainly driven by 1) 12.1% YoY increase in operation segment including operating and maintenance income & financial income from service concession arrangements as the Baoshan Project commenced operation in early 2023, and the growth was mostly fueled by the increase in WWT/water supply volume by 2.7%/2.7% YoY while tariffs of WWT/water supply were adjusted by +4.7%/+1.2% YoY to Rmb1.80/Rmb2.50 per ton; and 2) 1.6% YoY increase in construction revenue. 1H23 GPM was at 35.8%, up 2.0ppt YoY, as the Baoshan Project enjoyed a higher GPM. Finance costs was up by 23.4% YoY with increasing borrowings. As a result, 1H23NP was up by 3.1% YoY to Rmb377m. COH by end-1HFY23 remained at a healthy level of Rmb2.21bn, with net OCF during the period stood at Rmb1.2bn.

CROSBY Research – SIIC (807 HK): Growth driven by the new Baoshan project