United Strength Power (2337.HK) Q4 2024 Earnings Report

United Strength Power Holdings Limited reported QQ4 2024 revenue of 1,942.46 million CNY, down 6.68% year over year, with a gross profit of 113.91 million CNY and a gross margin of 5.86%. Operating income totaled 33.80 million CNY (operating margin 1.74%), and net income reached 20.41 million CNY (net margin 1.05%). Despite the revenue decline, earnings per share (EPS) stood at 0.0545 CNY, up 23.58% year over year, reflecting a combination of cost controls and the tax regime reflected in the period. QoQ metrics were flat on revenue, gross profit, operating income, and net income, indicating limited seasonal variance across the latest quarters. From a profitability and cash-flow perspective, the quarter shows a modest operating cadence but a negative free cash flow profile. EBITDA was 40.73 million CNY, while net cash provided by operating activities was negative 15.25 million CNY due to working-capital dynamics (change in working capital negative 50.72 million, accounts receivable negative 30.69 million, and other working capital effects negative 42.58 million). Free cash flow registered at negative 19.28 million CNY. The balance sheet reveals a leverage-intensive position: total debt of 757.91 million CNY versus cash and cash equivalents plus short-term investments of 158.63 million CNY, yielding a net debt of 687.63 million CNY. The company also reported a current ratio of 1.211 and a quick ratio of 1.084, consistent with a liquidity stance that is adequate but not expansive. Debt remains concentrated in short-term facilities (short-term debt of 532.53 million CNY and long-term debt of 225.38 million CNY). Compared with peers in the Hong Kong-listed energy space (e.g., 3900.HK, 3383.HK, 0754.HK, 0588.HK), United Strength Power trades at a trailing P/E around 6.5x and a price-to-book near 1.05x, with a price-to-sales ratio of approximately 0.28x. The gross margin of 5.86% is below several peers, while net margins of about 1.05% place the stock in a lower-to-mid tier on profitability benchmarks. The segment’s growth runway appears tied to the expansion of the gas-refueling network and LNG/CNG demand in Northeastern China, but the balance-sheet risk (high leverage, negative operating cash flow in the quarter) warrants caution. The company did not publish explicit forward guidance in the QQ4 2024 release, limiting visibility on near-term targets. Overall, the stock presents a macro-appropriate upside in a stabilizing gas-refueling market, but the near-term risk is dominated by leverage, financing needs, and negative operating cash flow. An investment stance would be cautious to neutral, pending deleveraging progress, sustained cash-flow improvement, and clearer guidance on capex plans and station-network expansion.