Boer Power (1685.HK) Announces 2024 Interim Results

Boer Power Announces 2024 Interim Results

Enhancing EfficiencyThrough Multi-Sector Business Collaboration and Exploring Diverse Opportunities for Steady Development

Highlights of performance:

· Adhering to the prudent operation strategy, reducing costs and increasing efficiency while exploring opportunities. During the Period, the Group continuously upheld prudent and efficient measures to ensure healthy cash flow levels, actively sought potential business expansion opportunities, and committed to cost reduction and efficiency enhancement through resource integration and business adjustment. This approach ensured smooth supply chains and reasonable recovery of receivables.

· Achieving a stable recovery in a volatile environment, with revenue and gross profit maintaining steady growth. Our Group continued to focus on intelligent power management solutions, intelligent power supplies, and energy storage businesses, targeting sectors and markets such as telecommunications, data centers, municipal infrastructure (urban rail and wastewater), and overseas power projects. Despite the complex and volatile business environment, the Group achieved stable growth. During the Period, the Group’s revenue reached RMB272.9 million, representing a year-on-year increase of 4.8%. The gross profit margin grew steadily to 30.4%, with gross profit at RMB83.0 million, a year-on-year increase of 9.7%.

· Maintaining high operational efficiency, profitability steadily increases. The Group’s profit before tax and profit for the Period were RMB9.5 million and RMB6.8 million, representing year-on-year growth of 21.1% and 6.0%, respectively.

· Implementing stringent internal control systems and regulatory measures, further optimising the asset-liabilities structure. The Group continued to implement stringent internacontrol svstems and reaulatory measures, further optimising the asset-liability structure, maintaining stable borrowing and financiacosts, and laying a solid foundation for healthy future development.

(Hong Kong, 28 August 2024) Boer Power Holdings Limited (“Boer Power”, the “Company”, together with its subsidiaries the “Group”; Stock Code: 1685.HK), a leading solutions provider for intelligent electrical distribution systems and energy efficiency management in China, is pleased to announce its unaudited interim results for the six months ended 30 June, 2024 (the "Period" or the "1HY2024").

Flexibly Responding to Market Changes and Coordinating Multi-segment Operations Support Steady Development

In 1HY2024, amid frequent geopolitical conflicts, high inflation, and elevated interest rates, the global economy struggled forward, presenting both opportunities and challenges for our Group’s business environment. During the Period, our Group continued to adhere to a prudent business strategy, advancing steadily and cautiously within a manageable scope. The Group maintained prudent and efficient measures to ensure healthy cash flow levels, actively sought potential business expansion opportunities, and committed to cost reduction and efficiency enhancement through resource integration and business adjustment. This approach ensured smooth supply chains and reasonable recovery of receivables. Our Group continued to focus on intelligent power management solutions, intelligent power supplies, and energy storage businesses, targeting sectors and markets such as telecommunications, data centers, municipal infrastructure (urban rail and wastewater), and overseas power projects. Despite the complex and volatile business environment, the Group achieved stable growth. During the Period, the Group’s revenue reached RMB272.9 million (six months ended 30 June 2023: RMB260.4 million), representing a year-on-year increase of 4.8%. The gross profit margin grew steadily to 30.4% (six months ended 30 June 2023: 29.1%), with gross profit at RMB83.0 million, a year-on-year increase of 9.7%. 

Benefiting from efficient operational efficiency and solid business foundation, the Group’s profit before tax and profit for the Period were RMB9.5 million (six months ended 30 June 2023: RMB7.8 million) and RMB6.8 million (six months ended 30 June 2023: RMB6.4 million), representing year-on-year growth of 21.1% and 6.0%, respectively.

Amid frequent macroeconomic fluctuations, the Group was dedicated to maintaining stable development, actively enhancing management capabilities to promote synergy across business segments, and achieving cost reduction and efficiency improvements to withstand adverse externa limpacts. During the Period, the Group prudently evaluated and managed cash flowand balance sheet allocations, ensuring that trade receivables and payables, as well as inventory levels, remained healthy and stable. Additionally, the Group continued to implement stringent internal control systems and regulatory measures, further optimizing the asset-liability structure, maintaining stable borrowing and financial costs, and laying a solid foundation for healthy future development.

The One-Stop Intelligent Electrical Integrated Management Solution Closely Aligns with Industry Demands, and the Advantages of Its Proprietary Big Data Platform Continue to Stand Out.

In 1HY2024, Our proprietary big data platform, “Cloud Smart”, is guided by modern communication and connectivity technologies. It integrates data collection, intelligent analysis, and real-time monitoring functions. Additionally, it offers an onestop IEM Solutions, including hardware integration systems, customised operating systems and software, and online and offline operation and maintenance management products and services. This platform has received widespread acclaim in the market.

Meahwhile, our Group remains committed to technology-driven innovation, providing customers with a nearly unique one-stop IEM solutions in the industry, aligning cutting-edge technology with market demands. During the Period, our Group also actively focused on the digital needs of intelligent manufacturing and the new direction of dual-carbon goals. We aimed to enhance the integration of energy consumption and digital power distribution technology for industrial users, striving to upgrade our business towards a green, low-carbon transition and better support our customers in achieving their carbon reduction goals.

The Prospects in the Fields of Data Centers, Energy Storage, and Municipal Projects Are Promising, Leveraging the Advantages of Intelligent Power Management Solutions to Firmly Hold the Market.

As digital technology deeply integrates with the physical economy, data centers have become a vital component of new information infrastructure. Benefiting from the development opportunities of “new infrastructure” and the “East-to-West Computing Resource Transfer” initiative, along with the explosive growth in computing power demand, the scale of data center construction in China is continuously expanding. During the Period, leveraging extensive industry experience and technical expertise, our Group’s “One-Stop Data Center Solution” service has garnered widespread recognition and attention in the market, standing out among peers. The future expansion in the scale and number of data centers in China is expected to continue providing opportunities and benefits for the development of our Group’s business, further consolidating our leading position in the industry.

Against the backdrop of policies and plans focused on dual control of energy consumption and cost reduction with efficiency enhancement, the new energy and energy storage markets are developing rapidly. This growth is driving user demand for intelligent power and energy storage management systems, fostering growth opportunities for our Group’s business expansion. Our Group is seizing these development opportunities by providing industrial users, telecommunications and data center industry users with high energy consumption demands with a new one-stop intelligent power solution. Leveraging the integrated model of source-network-load-storage, we focus on user-side new energy and energy storage modules. Through intelligent computing distribution, decentralised new energy consumption, and peak-shifting energy reserves, we help industrial and telecommunicatins customers reduce operating energy costs while ensuring intelligent, safe, and stable energy management. This approach enhances production efficiency and supports customers in achieving energy savings and efficiency improvements.

Our Company’s business development also extends to the field of urban infrastructure, including providing intelligent power distribution management solutions for urban rail transit and sewage treatment projects and related facilities. During the Period, leveraging policy support, urban rail transit projects and upgrades to wastewater treatment projects have broad potential, providing expansion opportunities for the Group's intelligent power management systems and solutions business. Our Group also leveraged its professional advantages, contributing to the longterm development of municipal infrastructure projects by providing energy-saving, efficient, and stable intelligent power distribution solutions. Our efforts were recognised with the “2024 China Urban Rail Transit Green Innovation Award”, which highly acknowledges our breakthroughs in environmental protection and energy-saving technologies for urban rail transit, fully demonstrating our business strength in municipal projects such as rail transit.

In addition, our Group has continued to focus on highend markets during the Period, maintaining long-term partnerships with numerous Fortune Global 500 companies, leading domestic firms, and internationally renowned large enterprises. We have sustained long-term and stable relationships with our customers, always prioritising their needs. Through continuous technological innovation and service optimisation, we provide customised intelligent solutions, long-term maintenance, consultancy services, and related products. This helps our customers achieve cost savings, efficiency improvements, and sustainable development in their power distribution and consumption processes.

In terms of overseas markets, given the current phase of power equipment updates in the European and American markets, there is a surge in the demand for power equipment procurement. Our power components and intelligent power distribution solutions have significant potential in these markets. We have also strengthened our existing sales network and explored overseas development opportunities through various channels. By leveraging our overseas branches, we provide highend power distribution products and services tailored to the needs of global customers. Our Spanish subsidiary, in particular, has deepened its coverage of the European market during the Period, contributing stable revenue through multiple channels. In response to China’s “Belt and Road” initiative, our Group has combined its resources and business advantages to capitalise on policy support and emerging opportunities in the overseas power industry. We aim to contribute to the national “Power Going Global” strategy.

Mr. Qian Yixiang, Chairman and CEO of Boer Power said, “Looking back at the first half of 2024, with cyclical factors weakening, global economic activity gradually recovered. However, due to the escalation of trade tensions and increased policy uncertainty, the rate of interest rate cuts slowed down. Additionally, geopolitical tensions have intensified, leading to continued macroeconomic uncertainty and a challenging business environment.

During the Period, the Group continued to ur Group will continue to adopt robust and efficient corporate governance strategies to ensure a healthy cash flow level. This effectively promoted cost reduction and efficiency improvement of resources, smooth supply chain operations, and reasonable recovery of receivables. As we enter the second half of 2024, our Group will remain committed to our core values of “learning, innovation, action, and persistence”, forging ahead on the path of green development to strengthen the national energy storage capacity. We will deepen our strategic layout in important industries and markets related to intelligent power management, including grid distribution intelligence, communication and data centers, rail transit, sewage treatment, and overseas business. Furthermore, our Group will continue to adopt robust and efficient corporate governance strategies, prudently plan and reasonably assess the cash flow of various projects, maintain healthy profit margins and cash flow levels, and ensure our Group moves steadily in a rapidly changing market environment. At the same time, we will seize the excellent opportunities presented by the digital and intelligent development of user-side power management, further strengthen our core competitive advantages in technological capability and innovation, and fully promote our sustainable development strategy, committed to creating long-term and sustainable value returns for shareholders and society.”