15 Aug 2023

CEG’s 1H23 revenue was down by 9% YoY to HK$3,820m, driven by a mixture of factors: 1) 43% YoY decrease in HWT business on the back of -15%/-89% YoY in operation /construction revenue; 2) 0.3% increase in biomass business due to -3%/ +27% YoY in operation/construction revenue; 3) and +13%/+13% YoY in ER/wind & solar business to HK$80m/HK$112m. Overall revenue contribution from construction/ operation/ finance has tilted to 12%/83%/5% in 1H23 from 17%/79%/ 4% in 1H22, which shows a more healthy revenue breakdown with operation segment accounted over 80% of total revenue. GPM was up by 2.0ppt to 25.1% partly due to unit cost of biomass decline significantly. Admin ratio rose 1.5ppt to 7.7% while finance cost was up by 8.4% YoY to HK$398m on the back of 3% YoY increase in total loans to HK$21.4bn. As a result, NP was down by 29% to HK$264m. CEG declared an interim DPS of HK$0.025 (1H22: HK$0.036), representing a payout ratio of 19.6% (1H22: 20.0%).

CROSBY Research – Greentech(1257 HK/BUY): Increasing EBITDA for its biomass segment