04 Sep 2023

1H23 revenue was down by 1.7% YoY to Rmb10.0bn, mainly due to 1) 2.8% YoY decline in NG sales, which accounted for 66.0% of total revenue (1H22: 66.7%), on the back of a 2.9% YoY decline in NG sales volume, partially offset by 2) 0.6% growth in wind and solar power sales, which accounted for 34.0% of total revenue (1H22: 33.3%), with a slight increase in installed capacity and a slight decline in utilization hours. Overall GPM was up down 2.0ppt YoY to 27.7% as GPM for NG decreased by 4.1ppt YoY to 7.6%, partially offset by a 0.2ppt YoY increase of wind/solar segment to 66.1%. Admin cost ratio was up by 0.16ppt YoY to 2.65% mainly due to the amortization of intangible assets and an increase in consulting fees, and R&D expense was up 384% YoY to Rmb183m amid increase R&D in technology projects. Effective tax rate rose 3.2ppt YoY to 17.5%. As a result, recurring 1H23 NP lowered by 11.0% YoY to Rmb1,439m, which accounted for 63% (1H22: 71%, 1H21: 71%) of our new FY23 forecast. Since IPO, no interim dividend was announced.

CROSBY Research – Suntien Green Energy (956 HK/BUY): NG/Wind NP down by 48%/8% YoY