Boer Power Announces 2022Annual Results

Results Highlights:

·         In 2022, facing the pandemic and many challenges in the supply chain, the Group developed steadily and achieved good results,recording a revenue of RMB626.6 million, representing a year-on-year increase of 9.4%.

·         During the Year, supply chains were under pressure imposed by pandemic, which led to higher production costs.The gross profit margin of the Group fell from the previous year but remained high at 29.2%, while gross profit for the Year reached RMB183.1 million.

·         Benefitting from the solid foundation for efficient operation this year, the Group’s profit from operations, profit before taxation and profit for the year amounted to RMB59.8 million, RMB32.1 million and RMB30.1 million respectively. The Group’s profit for the year grew by 141.5%. Excluding the one-off gain from the disposal of certain subsidiaries of the Group in 2021, the Group’s profit from operations and profit before taxation increased by 98.7% and 1,101.8% year-on-year respectively.

·         The Group optimised the debt structure on an ongoing basis, maintained debt and finance costs at a stable level and further improved the gearing structure, thereby generating positive operating cash flows for seven consecutive years.

(Hong Kong, 27 March 2023) 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 audited annual results for the year ended December 31, 2022 (the “Year”or “2022”).

Steady Performance Growth and Continuous Improvement in Operational Efficiency

In 2022, global economic recovery was slow due to the serious impacts on commodity prices and supply chains imposed by the pandemic and geopolitical conflicts. The resurgence of the pandemic across China also brought challenges to the Group’s operation. In the face of the uncertain market environment, the Group timely assessed and adjusted its business strategies to incorporate the concepts of refined management and efficient development in all production, manufacturing and operation segments. With the ongoing enhancement of business management and overall efficiency, the Group maintained smooth operations by minimizing the loss in the supply chain caused by the pandemic.

During the Year, the Group continued to give full play to its leading economies of scale and superior technology, so as to boost price and service competitiveness. Leveraging years of industry experience and the huge clientele in the communication data centre, rail transit and municipal construction sectors, the Group performed well against the weakening economy and consumption during the Year. In 2022, the Group registered an increase in sales and recorded a revenue of RMB626.6 million (2021: RMB572.6 million), representing a year-on-year increase of 9.4%. Supply chains were under pandemic-imposed pressure which led to higher production costs. The gross profit margin of the Group fell from the previous year but remained high at 29.2% (2021: 33.5%), while gross profit for the year reached RMB183.1 million. Benefitting from the solid foundation for efficient operation this year, the Group’s profit from operations, profit before taxation and profit for the year amounted to RMB59.8 million (2021: RMB124.1 million), RMB32.1 million (2021: RMB96.7 million) and RMB30.1 million (2021: RMB12.5 million) respectively. The Group’s profit for the year grew by 141.5%. Excluding the one-off gain of RMB94.0 million from the disposal of certain subsidiaries of the Group in 2021, the Group’s profit from operations and profit before taxation increased by 98.7% and 1,101.8% year-on-year respectively.

Facing the complex and volatile economic environment, the Group maintained high corporate governance standards to ensure healthy and sustainable development. Apart from strengthening risk management, it exercised tight control on the size of debt and attached great importance to the health of cash flow. During the Year, the Group continued to implement a stringent internal control system. It strictly monitored and managed its current assets and liabilities, while keeping its trade receivables and inventory at a sound level. Besides, the Group optimised the debt structure on an ongoing basis, maintained debt and finance costs at a stable level and further improved the gearing structure, thereby generating positive operating cash flows for seven consecutive years.

One-stop Intelligent Power Integrated Management Solutions with Outstanding Competitive Advantages; Fruitful Results in Power Consumption Database Management

The Group focused on modern communication and Internet technology. Through its own “Cloud Smart” big data platform, it developed one-stop intelligent power integrated management solutions, which included hardware integrated systems, customised operating systems and software as well as products and services for online and offline operation and maintenance management. These solutions helped customers achieve intelligent power distribution and power consumption, so that they could enhance performance management capabilities. In order to ensure the safe operation of power equipment for customers and improved efficiency, the Group collects customer-side power data and conducts two-way transmission with superior technology. At the same time, it monitored the operation status of power distribution and electrical equipmentthrough the Internet for customers around the clock.

As an industry-leading service provider with more than 35 years of extensive experience in the sector, the Group has prominent first-mover advantages and is increasing competitive edges in providing customers with almost unique one-stop intelligent power integrated management solutions in the industry. Over the years, the Group has gained in-depth technical expertise in intelligent power management. Recently, the Group has committed to strengthening the power consumption database for various industries and yielded remarkable results. While offering safe and reliable intelligent power distribution services, the Group also strives to control operating costs in a bid to create real commercial value and benefits for customers.

Take Advantage of Digital Transformation and Closely Follow National Policy to Vigorously Expand Business Development Space

In recent years, the modes of production and business inthe conventional economy have changed fundamentally andall industries have undergone digital transformation drivenby continuous breakthroughs in new technology, includingartificial intelligence, cloud computing, big data and blockchain.Moreover, full policy support has been given to promote thedigital economy. As the source of computing power fordata processing, data centres are the key infrastructure in digitaltransformation and development. Over theyears, the Group has intensely developed the power distributionmarket for data centres. It actively analyses customer needsand optimises power distribution technology to seek innovativebreakthroughs. With an acute sense of market demand andyears of industry experience, the Group has attracted numeroustarget customers in the data centre industry. It is expected thatthe increase in the scale of data centres will create more room forbusiness development.

Besides, the Group was committed to providing diversified services and customised solutions for various infrastructure construction and municipal construction projects, including intelligent power

management solutions to buildings, rail transit, sewage treatment and different types of transportation hub projects. Driven by the favourable national policies such as vigorously developing new infrastructure construction, the Group has received strong support for the business in infrastructure projects such as rail transit and sewage treatment, which has also exerted a positive impact on its profitability.

During the Year, the Group ranked top in terms of market share in the high-end markets, and a number of Top 500 companies inthe world and large-scale international enterprises both at homeand abroad were long-term customers who have developedstable and long-term relationship with the Group. Adhering tothe philosophy of providing reliable quality products and servicesfor a long time, the Group has been customising intelligent,energy conserving and highly efficient system solutions basedon customer demand, and offered long-term maintenance andconsultancy services and relevant products, which were widelyrecognized by the market. During the Year, the Group recorded asteady income growth in its business due to the gradual increasein orders from long-term large – and medium-sized customers. Inaddition, the continuous cooperation with a number of domesticleading companies in the communication and data centreoperation sectors enabled the Group to garner a well-establishedpresence and gain sound brand reputation in the industry.

Regarding the overseas market, with the resurgence ofthe pandemic worldwide and uncertainties in its businessenvironment, the Group has adopted a cautious approach bycomprehensively considering various risks and carrying outprudent planning for the business presence and developmentin overseas. Its overseas branches saw steady developmentduring the Year. Meanwhile, actively seizing the opportunitiesarising from the recovery of certain markets around the globe,the Group leveraged its existing global sales network to providehigh-end power distribution products and services for customersin Europe and other overseas countries, thereby contributing a

steady income stream to the Group and further seizing the overseas high-end market share. Looking ahead, the Group’searnings from the overseas market are expected to continue torecover as the world opens up from the pandemic.

Mr. QianYixiang, Chairman and CEO of Boer Power said, “During the past year, the global economic development continued to be affected by multiple factors such as the pandemic, inflation and intensifying geopolitical conflicts. Nonsetheless, the Group made timely adjustments to its operation strategies, tightened control over costs and expenses, enhanced innovation and research and development, and continued to consolidate its strength and leading position in the intelligent power management industry, thus achieving steady growth in results. Looking ahead to 2023, as the pandemic impact will wane and the overseas markets will continue to recover, and after relaxing China's pandemic control measures generally, attention will return to economic development and the launch of a series of economic stimulus policies will accelerate the recovery of the domestic economy. The Group will actively seize the development opportunities to be presented by the recovery of the domestic and overseas markets, strengthen its plan of developing business presence, and closely follow the national policies in a bid to fully exploit the development opportunities arising from the industries such as intelligent power grid and power grid distribution, communication and data centres, rail transit and wastewater treatment leveraging the trend of China’s vigorous development and construction of new infrastructures. At the same time, the Group will be bold in striving to secure more new customer bases and innovating by improving its technology and product quality continuously to further strengthen the core competitiveness and profitability of the Group. In addition, the Group will continue to review its risk management capabilities, optimisethe quality of its assets, strengthen cost control, reduce liabilities and maintain financial stability to lay a solid foundation for the sustainable development of the Group.”