Xinyi Energy Announces 2024 Interim Results-Maintains Operational Resilience and Prudently Advances Acquisition Plan

(31 July 2024, Hong Kong) – Xinyi Energy Holdings Limited (“Xinyi Energy” or the “Group”; Stock Code: 03868), a leading non-state-owned solar farm owner and operator in the PRC, today announced its unaudited interim results for the six months ended 30 June 2024 (“1H2024” or the “Period”).

During 1H2024, the Group's business performance remained stable despite the challenging external economic and operating environment, demonstrating its strong operational resilience and risk resistance capabilities. During the Period, the Group’s revenue amounted to HK$1,218.4 million (1H2023: HK$1,288.6 million) due to the impact of electricity curtailment losses from grid consumption, increase in market-based electricity trading and depreciation of Renminbi (“RMB”) against Hong Kong Dollar (“HKD”). Compared with the same period last year, the Group's revenue contribution from sales of electricity decreased slightly by 4.0% to HK$698.3 million (1H2023: HK$727.5 million), accounting for 57.3% of total revenue. The cash flow generated from the Group’s operating activities has progressively improved with the addition of grid-parity solar farm projects in 2024.

The Group’s gross profit was HK$782.5 million (1H2023: HK$904.6 million), mainly due to the decrease in revenue and increase in cost of sales. The overall gross profit margin was 64.2% (1H2023: 70.2%).

Net profit attributable to equity holders of the Group for the Period was HK$394.5 million (1H2023: HK$566.9 million). Net profit margin for 1H2024 was 32.4% (1H2023: 44.0%). Basic earnings per share attributable to equity holders of the Company was 4.78 HK cents (1H2023: 7.48HK cents).

The Board proposed the distribution of an interim dividend of 2.3 HK cents per share (1H2023: 3.4HK cents per share). The dividend payout ratio is 48.1%.

The Group’s financial position remained healthy in the face of the complex and volatile macro environment. As at 30 June 2024, it had cash and cash equivalents of HK$472.1 million and a net debt gearing ratio of 47.3%. In 1H2024, net cash generated from operating activities amounted to HK$170.4 million. As the solar farm projects acquired from Xinyi Solar are denominated and settled in RMB, the use of onshore bank borrowings can help to reduce the financing cost as compared with offshore bank borrowings. During the Period, the Group increased the drawdown of onshore bank borrowings and shifted from short-term bank borrowings to long-term ones to alleviate short-term financing pressure and ensure financial stability. As at 30 June 2024, 21.9% of the total bank borrowings were denominated in RMB and the effective interest rate was reduced to 4.7%.

As at 30 June 2024, the Group owned 40 utility-scale solar farm projects, with an aggregate approved capacity of 3,850.5 MW. In 1H2024, the Group completed the acquisition of a utility-scale solar farm project from Xinyi Solar Holdings Limited (“Xinyi Solar”), located in Guangdong Province, with an approved capacity of 200 MW. In February, the Group entered into sale and purchase agreements with Xinyi Solar, pursuant to which the Group agreed to acquire a total of eight utility-scale solar farm projects, with a total approved capacity of 790 MW. The acquisition plan of these solar farm projects is expected to commence in the third quarter of 2024. In 2024, the Group will proceed prudently and orderly to acquire several utility-scale grid-parity solar farm projects with a total approved capacity of 700 to 1,000 MW, in accordance with actual market conditions. Xinyi Solar currently has approximately 1.9 GW of pipeline projects for the Group’s future acquisitions, of which 1.6 MW are grid-parity projects. As PV module prices are expected to decrease significantly in the second quarter, the expected yield of the projects will improve.

Mr. Lee Shing Put, B.B.S., Chairman and Executive Director of Xinyi Energy, concluded, “In the first half of 2024, the PV market was affected by electricity curtailment and market-based electricity trading, and the overall operating environment was relatively difficult. In response to the issues of social electricity consumption and power consumption, the PRC has launched corresponding policies to promote electricity consumption and enhance the overall energy storage capacity to support the development of the electricity market and achieve the ‘dual carbon’ goal. As a solar farm operator, Xinyi Energy will carefully identify, evaluate and select solar farms based on market conditions and steadily advance its acquisition plan.”