Description of the event

The company achieved operating income of 194.262 billion yuan in the first half of the year, up 1.11% year on year; attributable net profit of 2.782 billion yuan, up 4.67% year on year; after deducting net profit of 2.328 billion yuan, a decrease of 0.89% year on year. The company achieved revenue of 96.858 billion yuan in the second quarter, a year-on-year decrease of 6.51%; vested net profit of 1.301 billion yuan, a year-on-year decrease of 15.16%; and net profit after deduction of 1.21 billion yuan, a year-on-year decrease of 9.18%.

Incident comments

The company's revenue for the second quarter was under slight pressure, and is expected to gradually improve in the second half of the year. The company achieved revenue of 194.262 billion yuan in the first half of the year, up 1.11% year on year; the company achieved revenue of 96.858 billion yuan in the second quarter, a decrease of 6.51% year on year.

The gross margin improved year over year, and the expense ratio increased slightly. The company's comprehensive gross profit margin for the first half of the year was 12.19%, up 1.26pct year on year. Looking at the second quarter, the company's comprehensive gross profit margin was 13.69%, up 2.01 pct year on year; in terms of cost ratio, the company's expense ratio for the first half of the year was 8.22%, up 0.94 pct year on year. Among them, sales, management, R&D and financial expense ratios changed 0.08, 0.11, 0.31, 0.44pct to 0.52%, 3.65%, 2.48% and 1.57% year on year, respectively. 1.68pct. Among them, sales, management, R&D, and financial expense ratios changed 0.12, 0.32, 0.53, and 0.72pct year-on-year to 0.54%, 3.55%, 3.31%, and 1.74%, respectively. Taken together, the company's net interest rate in the first half of the year was 1.43%, up 0.05 pct year on year, 1.20% year on year, down 0.02 pct year on year; net vested interest rate for the second quarter was 1.34%, down 0.14 pct year on year, and net interest rate after deduction was 1.25%, down 0.04 pct year on year.

Cash outflows increased slightly, and the cash to cash ratio increased. The company's net cash flow from operating activities in the first half of the year was 14.515 billion yuan, up 0.883 billion yuan year on year, up 6.47 pct year on year. Looking at the second quarter, net cash flow from operating activities was 1.678 billion yuan, down 0.14 billion yuan year on year, with a revenue ratio of 89.69%, up 5.44 pct year on year; at the same time, the company's asset debt ratio increased by 1.56 pct to 77.39% year on year.

Domestic new energy contracts are booming, and the “Belt and Road” initiative has achieved great results. During the reporting period, the company achieved a new domestic contract amount of RMB 563.22 billion, an increase of 15.81% over the previous year. A number of key projects have been signed, including the Hubei Ezhou Power Plant Phase IV (2 x 1000 MW) expansion project, Tianjin Xiqing District Wind Power EPC General Contract, China Energy Construction Co., Ltd. 1 Million Kilowatt Source Network Cargo Storage EPC General Contract, River Diversion Project, and the International Dry Port Area Comprehensive Development Project of the Zhengzhou Airport Economic Comprehensive Experimental Zone. The amount of new contracts signed overseas was RMB 175.381 billion, an increase of 9.90% over the previous year; among them, the amount of new contracts signed by the “Belt and Road” co-construction countries increased by 44.25% year on year. A number of key projects have been signed, including Indonesia's Tripa Cascade Hydropower Project, Mexico's Puebla 306 MW PV Project, and South Korea's Nakwol365 MW Offshore Wind Power Project.

A leader in energy construction, watching the progress of the hydrogen energy industrial park at the end of the year. China has an international leading edge in the fields of energy construction UHV AC/DC, and undertakes more than 70% of China's million-kilowatt thermal power plants, 90% of UHV engineering survey and design tasks, more than 60% of conventional nuclear power plants, more than 50% of large-scale hydropower projects, and more than 20% of new energy engineering design and construction tasks in the new era.

In addition, the company has deep technical accumulation and industrial layout in the fields of new energy storage such as compressed air energy storage and hydrogen energy storage. The scale of the hydrogen energy industrial park project that the company has invested in in the past two years has exceeded 100 billion dollars. Among them, the Jilin Songyuan green hydroaminol integration project is the world's largest integrated green hydrogenol project. It is expected that the main construction will be completed by the end of the year. After operation, it will bring new green energy storage solutions to the industry and create a trillion green hydrogen market.

Risk warning

1. Risk of new energy development falling short of expectations; 2. Risk of international operation; 3. Risk of mine capital expenditure falling short of expectations.