Clean energy revenue growth was outstanding in the first quarter of 2024. The company's revenue for the first quarter of 2024 fell about 7% year on year to 4.63 billion yuan (RMB, same below), mainly affected by the 59%/12% year-on-year decline in revenue in the chemical/liquid food sector. Among them, the chemical sector is still at the bottom of the industry cycle, and revenue has declined for two consecutive quarters compared to the previous month. The chemical sector was affected by delays in two projects in the Americas. Clean energy revenue, however, maintained a strong trend of 21% year on year. Among them, overseas revenue surged 64% year on year, mainly driven by marine products. In addition, revenue from hydrogen energy products increased 74% year on year to 170 million yuan during the period.
Clean energy orders remain high. In terms of new orders, clean energy orders doubled year on year to 6.2 billion yuan in the first quarter. Among them, new orders for LNG car bottles and clean water energy increased significantly, and new orders for hydrogen energy products increased 30% year over year to 220 million yuan. Overall on-hand orders ($26.9 billion, +42% YoY) and on-hand clean energy orders ($20 billion, +71% YoY) continued to reach record highs in the first quarter due to ideal growth in new orders.
The chemical sector needs to stabilize, and the visibility of clean energy growth has increased. Although the chemical environment still saw a month-on-month decline in on-hand orders, management said that during the first quarter, they saw a continuous improvement in demand for special tanks. The trend of customer suitcases accelerated during the same period, and the inventory of new boxes in the factory declined markedly, which is close to normal levels. We believe these signs of stabilization will help us determine whether an inflection point in the sector can occur in the second half of the year. Also, although the project has been delayed, the current 5.9 billion on-hand orders for liquid food are still at an all-time high. Management said the liquid food segment revenue increased by double digits this year. As for the clean energy sector, management expects 8 ships to be delivered this year, and some orders for clean water energy are also scheduled for 2027. We believe there is a guarantee for the sector's growth over the next three years.
Uncertainties in the chemical/liquid food segment have been reflected, and the downside risk of valuation is limited. We believe that market concerns about the current growth in the chemical and liquid food sectors should be broadly reflected. The clean energy sector should currently be more prosperous than we expected, and the downside risk of valuation should be limited. We maintain the company's profit forecast and target price of HK$9.04, and maintain our buying rating.