CROSBY Research – China Everbright Greentech (1257 HK/BUY): FY23 results preview

29 Jan 2024

CEG’s 1H23 revenue edged down by 9% YoY to HK$3,820m, and 1H23NP was down by 29% YoY to HK$264m. We expect 2H23 results could be worse than 1H23, on the back of i) deteriorating demand of its HWT business, with lower treatment volume and ASP; ii) less construction activities in both its biomass and HWT segments, which the company planned to suspend its expansion in HWT business; iii) collection pace of government subsidies remained uncertain; and iv) significant amount of provision for asset impairment. As a result, we expect the company to record a significant loss in FY23.