Shenghui Cleanness Grp (2521.HK) Q4 2024 Earnings Report

Shenghui Cleanness Grp Hldg delivered QQ4 2024 revenue of 173.89 million CNY, a YoY decline of 46.45% from the prior year’s Q4 level, with a gross margin of 19.74% and gross profit of 34.33 million CNY. The quarter showed a negative operating income of 5.73 million CNY (operating margin -3.29%), but EBITDA of 6.42 million CNY and a net income of 19.54 million CNY contributed to a positive bottom line. A notable feature of the period was a substantial contribution from other income (net) of 29.71 million CNY, which helped lift pretax income to 23.98 million CNY and after tax earnings to 19.54 million CNY, translating to an EPS of 0.0119 CNY. The discrepancy between operating losses and net income is driven by non-operating income and tax effects rather than core operating performance. From a liquidity and balance sheet perspective, Shenghui exhibits a robust liquidity position. Operating cash flow was 1.31 million CNY, while capital expenditure totaled 7.04 million CNY, yielding a negative free cash flow of 5.73 million CNY. The company reports cash and cash equivalents of 91.11 million CNY and total cash plus short-term investments of roughly 94.76 million CNY, supporting a net cash position of approximately -31.36 million CNY. Total current assets stood at 380.50 million CNY against current liabilities of 164.60 million CNY, supporting a healthy current ratio of 2.31. Notably, accounts receivable is sizable at 268.07 million CNY, implying stretched working capital and higher days sales outstanding (DSO) of about 138.75 days, contributing to a cash conversion cycle of 125.86 days. The quarterly result, when viewed in the context of the four-quarter trend to 2024, reflects a pronounced revenue deceleration (Y/Y). While the company posted a positive net income in QQ4 2024, the operating framework remains challenged by elevated operating expenses relative to revenue and a working capital burden. The stock trades with a trailing P/E around 7.2 and a price-to-book around 1.46, suggesting a modest valuation that could reflect embedded operating risks or market uncertainty around near-term growth prospects. Investors should monitor progress toward margin stabilization, collection efficiency, and any visible improvement in operating leverage.