Executive Summary
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.
Key Performance Indicators
QoQ: -30.27% | YoY:-17.18%
QoQ: -47.64% | YoY:-24.67%
QoQ: -43.96% | YoY:-14.50%
QoQ: -104.93% | YoY:-178.95%
QoQ: -104.96% | YoY:-178.57%
Key Insights
Revenue: HKD 908,566,500 | YoY: -17.18% | QoQ: -30.27%
Gross Profit: HKD 347,320,500 | Gross Margin: 38.22%
EBITDA: HKD 697,434,500 | EBITDA Margin: 76.76%
Operating Income: HKD 299,396,500 | Operating Margin: 32.95%
Net Income: HKD -7,369,500 | Net Margin: -0.81%
EPS (Diluted): HKD -0.0033
Interest/Taxes/Non-Operating: Total Other Income/Expenses Net HKD -223,695,000; Income Before Tax HKD 75,701,500; Income Tax HKD 44,257,000
Cash Flows: Operating Cash Flow HKD 863,624,979; Capex HKD -454,927,...
Financial Highlights
Revenue: HKD 908,566,500 | YoY: -17.18% | QoQ: -30.27%
Gross Profit: HKD 347,320,500 | Gross Margin: 38.22%
EBITDA: HKD 697,434,500 | EBITDA Margin: 76.76%
Operating Income: HKD 299,396,500 | Operating Margin: 32.95%
Net Income: HKD -7,369,500 | Net Margin: -0.81%
EPS (Diluted): HKD -0.0033
Interest/Taxes/Non-Operating: Total Other Income/Expenses Net HKD -223,695,000; Income Before Tax HKD 75,701,500; Income Tax HKD 44,257,000
Cash Flows: Operating Cash Flow HKD 863,624,979; Capex HKD -454,927,625; Free Cash Flow HKD 408,697,354
Balance Sheet: Total Assets HKD 48.40bn; Total Liabilities HKD 29.05bn; Total Debt HKD 26.56bn; Net Debt HKD 22.92bn; Cash & Equivalents HKD 3.65bn; Current Ratio 1.87x; Quick Ratio 1.87x; Debt to Equity 2.01x; Debt to Capitalization 0.668x; Long-Term Debt to Capitalization 0.599x
Asset Quality & Efficiency: Inventory HKD 44.69m; Receivables HKD 9.36bn; Inventory Turnover 12.56x; DSO 927.6 days; Asset Turnover 0.0188x; Fixed Asset Turnover 0.0381x
Valuation Metrics: P/B 0.270x; P/S 3.93x; P/E NA (negative net income); EV/EBITDA 37.98x; No dividend yield (0%).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
908.57M |
-17.18% |
-30.27% |
| Gross Profit |
347.32M |
-24.67% |
-47.64% |
| Operating Income |
299.40M |
-14.50% |
-43.96% |
| Net Income |
-7.37M |
-178.95% |
-104.93% |
| EPS |
0.00 |
-178.57% |
-104.96% |
Key Financial Ratios
operatingProfitMargin
33%
priceEarningsRatio
-121.21
Management Commentary
Note: No earnings call transcript was provided in the data. Therefore, no verbatim management quotes or highlights could be extracted. Key thematic expectations for management in typical calls would include commentary on project pipeline progression, capital deployment strategy, deleveraging plans, and any cost optimization programs. Given the results, stakeholders would anticipate discussions around pipeline execution timelines, potential asset monetization opportunities, and steps to improve working capital efficiency and reduce reliance on debt financing.
Forward Guidance
No formal quantitative guidance was disclosed for QQ4 2024 or 2025 in the supplied data. Given the cash generation in operations and the sizable capex/depreciation load, the company could pursue: 1) deleveraging by capturing higher-value asset monetization or divestitures of non-core holdings; 2) optimization of project pipeline, prioritizing higher-return distributed PV and wind assets; 3) working capital improvements to reduce receivables days and normalize payables. Industry tailwinds remain in China’s renewables push, favorable policy support for PV/wind developments, and potential growth in distributed generation and clean heat initiatives. The achievability of improved profitability hinges on successful pipeline realization, stabilization of depreciation charges (asset base), and a measured pace of new debt while maintaining liquidity buffers. Key monitoring factors include: progress on major project commencements, debt reduction progress, capex cadence, and any regulatory or subsidy changes affecting project economics.