Blog

Jul 05, 2023

SIHL Profit Increases 25% in the First Half Illustrating Business Elasticity

News provided by 30 Aug, 2023, 18:48 CST Share this article Greater Profit is Expected from Big Health Business in the Future HONG KONG, Aug. 30, 2023 /PRNewswire/ -- Shanghai Industrial Holdings

News provided by

30 Aug, 2023, 18:48 CST

Share this article

Greater Profit is Expected from Big Health Business in the Future

HONG KONG, Aug. 30, 2023 /PRNewswire/ -- Shanghai Industrial Holdings Limited ("SIHL" or the "Company", together with its subsidiaries collectively referred to the "Group"; HKSE stock code: 363) has announced its unaudited interim results ending on 30 June 2023. Revenue amounted to HK$12.791 billion. Profit attributable to owners of the Company amounted to HK$1.376 billion, representing an increase of 24.6% year-on-year. The Board of Directors has recommended an interim dividend of HK42 cents per share as gratitude for shareholders' long-term support.

2023 Interim Results Highlights

For six months ended 30 June

(Unaudited)

2023

2022

Change

Revenue (HK$ million)

12,791

15,220

-16.0 %

Profit attributable to owners of the Company (HK$ million)

1,376

1,104

+24.6 %

Earnings per share - Basic (HK$)

1.265

1.015

+24.6 %

Interim dividend per share (HK cents)

42

42

Payout ratio

33.2 %

41.4 %

As at 30 June

(Unaudited)

As at 31 December

(Audited)

2023

2022

Change

Total assets (HK$ million)

178,339

193,934

-8.0 %

Equity attributable to owners of the Company (HK$ million)

44,548

45,524

-2.1 %

Cash and cash equivalents (HK$ million)

28,623

28,870

-7.3 %

Revenue and Profit Contributions by Business:

For the six months ended 30 June

(Unaudited)

Segment Revenue (HK$ million)

2023

2022

Change

Infrastructure and Environmental Protection

5,550

5,010

+10.8 %

Real Estate

5,926

8,546

-30.7 %

Consumer Products

1,315

1,664

-20.9 %

Total

12,791

15,220

-16.0 %

Segment Net Profit (HK$ million)

2023

2022

Change

Infrastructure and Environmental Protection

1,195

984

+21.4 %

Big Health

69

-

N/A

Real Estate

102

40

+155.6 %

Consumer Products

128

236

-45.7 %

Total

1,494

1,260

+18.5 %

In the first half of 2023, the international geopolitical situation remained tense. Some major currency interest rates had been continuously rapidly increased, causing exchange rate fluctuations that posed challenges for the operation of the Group. The Group seized opportunities brought by post-pandemic economic recovery and made a decisive shift towards embracing ESG (Environmental, Social, and Governance) values while implementing comprehensive transformation and upgrades. This resulted in stable operation and development of core businesses and preferable profit performance.

For the six months ended 30 June 2023, the unaudited revenue of the Group was HK$12.791 billion, representing a 16.0% decrease from the same period last year. Profit attributable to shareholders was HK$1.376 billion, representing a 24.6% increase year-on-year. The increase was primarily attributed to the substantial rebound in tariff revenue and traffic flow of the toll road business, as well as significant contribution from Big Health business newly acquired. The Board recommended an interim dividend of HK42 cents per share, with a dividend payout ratio of 33.2%, to reward shareholders' continuous support.

The Infrastructure and Environmental Protection Division recorded a profit of HK$1,195 million, representing an increase of 21.4% year-on-year and accounting for approximately 80.0% of the Group's overall profit. The increase in profits was mainly driven by a significant rise in traffic volume and toll revenue of toll road business. During the period, the Group accelerated the development and construction of benchmark solid waste projects in the Yangtze River Delta region. The key solid waste project, two sets of waste biogas generating units connected to the power-generating grid in Shanghai Baoshan Renewable Energy Utilization Center was completed in the second quarter, and the daily treatment capacity of the Baoshan project amounted to 3,800 tonnes. When fully put into use, it will play a leading role in the industry and effectively solve the garbage disposal issues in the service area. It will have a significant impact on improving the harmless treatment and resource utilization rate of garbage in Shanghai.

The Big Health business achieved a profit of HK$69 million, representing 4.6% of the Group's net profit. In November of last year, the Group completed the acquisition of 40% equity interests of Shanghai Pharmaceuticals Group through a joint venture with 50% stakes. This strategic investment will continue to generate new contributions for the Group in the future.

In the first half of 2023, the Group's real estate business recorded a profit of HK$102 million, representing a year-on-year growth of 155.6% and accounting for approximately 6.8% of the Group's net profit. The increase was mainly due to strategic adjustment and continuous promotion of existing project works and the recovery of capital.

The consumer products business made a profit contribution of HK$128 million to the Group, representing a decrease of 45.7% over the corresponding period last year and accounting for approximately 8.6% of the Group's net profit. Nanyang Brothers Tobacco Company Limited ("Nanyang Tobacco") primarily focused on reducing inventory in overseas markets and gradually boosting sales across various channels. Due to weakened market demand and intensifying competition after the pandemic, there was an obvious year-on-year decline in the Wing Fat Printing business for tobacco and alcohol packaging, as well as the molded-fiber business.

Business Highlights:

Infrastructure and Environmental Protection

Big Health

Real Estate

Consumer Goods

Mr. Shen Xiao Chu, Chairman of SIHL, said, "In the second half of the year, the Company will remain committed to innovation and transformation with ESG values. For our infrastructure and environmental protection businesses, SIIC will closely follow national strategies and continue to seek new opportunities in the environmental protection sector. The Group will further optimize its strategy for the Yangtze River Delta region, as well as other key areas and river basins, and construct more high-standard and modern environmental protection projects, to maintain its leading position in China's water and environmental protection industries. Toll roads business will continue to improve its operational efficiency and maintain stable development. New contributions will be made to the Group through investments in medical, health, and green energy sectors. For the real estate business, the Group will pay close attention to changes in industry policies while promoting ongoing projects and accelerate capital recovery. Nanyang Tobacco will step up efforts in terms of fostering new products and cultivating innovative tobacco products in overseas markets to improve integrated strengths in internationalization and marketability. Wing Fat Printing will leverage technological innovation to continue breaking into the blue ocean market with environmental-friendly packaging. Overall, the Group will accelerate upgrades of its core businesses, seize opportunities to acquire high quality projects, to create greater value for shareholders."

About SIHL

Shanghai Industrial Holdings Limited ("SIHL", HKSE Stock Code: 363) is the largest overseas conglomerate under Shanghai Industrial Investments (Holdings) Co., Ltd ("SIIC"). As the flagship of the SIIC group of companies, SIHL has been successful in leveraging its strengths in Shanghai since listing, in terms of securing the best investment opportunities in mainland China with full support from the parent company. Over 20 years' development, SIHL has become a conglomerate company with four core businesses: infrastructure and environmental protection (including toll roads/bridge, and environmental protection related business such as sewage treatment and solid waste treatment), real estate, consumer products (including Nanyang Tobacco and Wing Fat Printing), and Big Health. SIHL will continue to raise its governance standard in order to create favourable returns and value for shareholders.

For more information about SIHL, please visit the company website at www.sihl.com.hk.

SOURCE Shanghai Industrial Holdings Limited