01 Mar 2023

SIIC reported its FY22 result with an increase in revenue by 14.3% to Rmb8.3bn (2021: Rmb7.3bn), driven by i) 10.4% YoY increase in operation revenue to Rmb3.46bn in the light of the 1.5%/3.1% YoY growth in WWT/water supply volume and a 9.5% YoY hike in average WWT tariff to Rmb1.86/tonne while the average water supply tariff was slightly down by 1.9% YoY to Rmb2.48/tonne; ii) 19.4% YoY increase in construction revenue to Rmb2.97bn, as its Shanghai Baoshan Project, which is a benchmark solid waste treatment project, has entered commissioning phase in Sept 2022; iii) 8.0% YoY increase in financial income to Rmb1.25bn and iv) surge in other revenue by 76.3% to Rmb0.48bn (FY21: Rmb0.28bn). Meanwhile, GPM was down by 1.4ppt YoY to 31.7% in FY22, with 4Q22 GPM was just 27.9% due to the increase in electricity, chemical and labor costs during the period. SG&A ratio declined by 0.6ppt YoY to 7.2% on good cost control and economies of scale. As a result, NP was up by 10.5% YoY to Rmb780m.

CROSBY Research – SIIC Environment (807 HK): Further expansion in GBA & YREB regions