Shandong HiSpeed New (1250.HK) Q3 2024 Earnings Report

Shandong HiSpeed New Energy Group Limited delivered a mixed QQ3 2024 performance characterized by revenue resilience in a capital-intensive renewables landscape but with a negative bottom line due to substantial depreciation and non-operating charges. Revenue declined 17.2% year-over-year and 30.3% quarter-over-quarter to HKD 908.6 million, while gross profit remained solid at HKD 347.3 million, yielding a gross margin of 38.2%. EBITDA stood at HKD 697.4 million, supporting a healthy operating cushion (operating income HKD 299.4 million; EBITDA margin ~76.8%), yet the company reported a net loss of HKD 7.37 million for the quarter, with earnings per share of -0.0033. The discrepancy between EBITDA and net income reflects heavy depreciation (HKD 397.6 million) and a net expense line including non-operating items (total other income/expenses net of -HKD 223.7 million). Cash generation remained robust at HKD 863.6 million from operating activities, while free cash flow reached HKD 408.7 million, aided by working capital dynamics and capital expenditure of HKD -454.9 million.

From a balance sheet perspective, the group maintains a large asset base and a highly leveraged capital structure. Total assets stood at HKD 48.40 billion, with total debt of HKD 26.56 billion and net debt of HKD 22.92 billion. The current ratio was 1.87x and the quick ratio 1.87x, but cash conversion is challenged by sizable receivables (DSO ~928 days) and significant long-term debt (HKD 21.46 billion). Management commentary on the quarter was not accompanied by formal guidance in the provided data; the absence of explicit forward guidance highlights a focus on deleveraging, optimizing the project pipeline, and reinforcing near-term liquidity. Investors should weigh the near-term profitability headwinds against the scale of the asset base and the potential for pipeline monetization and deleveraging over 2025.

Overall, the QQ3 results underscore a capital-intensive growth profile typical of renewable utilities in China: strong operating cash flow and EBITDA generation are offset by high depreciation, non-cash charges, and a leverage-heavy balance sheet. The near-term investment thesis hinges on deleveraging progress, the conversion of pipeline assets into revenue, and any improvement in working capital efficiency as the company scales its distributed PV and wind projects.