Boer Power Announces 1H2017 Results

Achieves 51% Rebound in Sales YoY, Assets and Liabilities Structure Improves
Boer Power Holdings Limited
2017-08-29 11:05 2523

HONG KONG, Aug. 29, 2017 /PRNewswire/ --

Financial Highlights

  • Driven by effective sales strategies, the Group's sales performance recorded rebounded. For the six months ended 30 June 2017, the Group's sales revenue rose to RMB392.1 million, representing an increase of 51.2% yoy, which represented 85.6% of total revenue in 2016.
  • As sales scale gradually revived, together with effective cost control measures during the Period, the Group's gross profit margin widened to 28.5%, representing an increase of 13.9ppts from 14.6% for FY2016.
  • The Group's assets and liabilities structure achieved significant improvement, while the collection of trade receivables was in good progress. As at 25 August, 2017, the Group received over RMB131.0 million from customers for settlement of outstanding trade receivables, loans to customers, retention receivables, bills receivables and gross amount due from customers from contract work as at 30 June, 2017.

Boer Power Holdings Limited," ("Boer Power", the "Company", together with its subsidiaries the "Group"; Stock Code: 1685.HK), a leading solutions provider for intelligent electrical distribution systems and energy efficiency management in China, is pleased to announce its unaudited interim results for the six months ended 30 June 2017 (the "Period" or "1H2017").

Recorded Significant Sales Rebound and Improvement on Assets and Liabilities Structure

Having experienced a relatively difficult adjustment cycle, the Group's business recovered gradually in 1H2017. With faithful support from of the long-term customers and proactive sales strategies, the Group achieved encouraging sales performance during the Period and received a number of large-scale orders in the domestic and the overseas markets. Sales revenue increased by 51.2% yoy to approximately RMB392.1 million, accounting for 85.6% of the full-year sales in 2016, all of which were non-factoring new orders. Driven by the significant sales growth and enhancing high-quality client relationship, gross profit margin for the Period saw a significant recovery from the 14.6% attained for the full-year of 2016, up by nearly 14 ppts, to approximately 28.5%.

While actively driving business expansion, the Group continued to enhance corporate internal management. As at 30 June 2017, the Group's assets and liability structure was greatly improved and it achieved good progress in collection of trade receivables. As at 25 August 2017, the Group's trade receivables reduced by RMB131.0 million as at 30 June 2017.

Encouraging Expansion of Overseas Business and Persistent Growth in Client Base

As at 30 June 2017, the business of the Group can be divided into the following four segments, namely Energy Efficiency Solutions ("EE Solutions"), Intelligent Electrical Distribution System Solutions ("iEDS Solutions"), Electrical Distribution System Solutions ("EDS Solutions"), and Components and Spare Parts Business ("CSP Business"). During the Period, the Group received several large-scale orders across various industries, including data center, medical services, infrastructure, telecommunications, rail transit, power grid and sewage treatment, boosting the sales revenue to RMB392.1 million, all of which were non-factoring sales.

As the digital economy developed rapidly, corporates are urged to build data centers to enhance their capabilities on data storage, computation and management, thus driving consistently strong market demand for the Group's "One-stop Data Center Solution". In 1H2017, the Group successfully won the bid for GDS Chengdu Data Center and Beijing Yizhuang Data Center, China UnionPay Information Center, Nanjing Cloud-computing Data Center -- Huai'an and Hefei Shushan Hightech Park Data Center, providing powerful driving force for the Company to resume strength in sales.

For the overseas market, after years of strategic planning, the Group is well-equipped to further expand its footholds to overseas during the Period and achieved excellent results, which included providing medium and low voltage iEDS Solutions to the cement engineering projects of Sinoma Architecture located in Kenya, Uganda and Cameroon; and winning the bid for water engineering project located in Surabaya, Indonesia in collaboration with Vinci Group, the top five global contractor.

Apart from proactively prospecting new orders, the Group has established a stable customer base in industries including infrastructure, rail transit, sewage treatment, medical services, telecommunications, broadcasting and consumption. The Fortune 500 companies and market leaders maintaining long-term cooperative relationships with the Group include HeidelbergCement AG, Degremont, Brembo, Budweiser, China Mobile, China Unicom, Alibaba, Baidu and CapitaLand. During the Period, the Group successfully received large-scale orders from CCTV, further enriching the Group's quality customer base.

Performs Expansion and Internal Management in Parallel, Sees Smart Real Estate and Rail Transit as New Drivers

Numerous countries around the world have undertaken initiatives in promoting development of data centers, and in turn drive the growth in demand for intelligent electricity distribution solutions. However, the ever-changing information revolution has given rise to rapid changes in requirements on the corresponding technologies. The industry has entered a period of consolidation featuring progressive elimination and price competition. In order to maintain its leading technological edge, the Group considers it necessary to increase R&D investments. Although this may restrain profit margins in the short term, the Group is confident about reinforcing its absolute leading edge in the data center industry with its years of project experience, leading core technology, strong and growing global customer network.

In addition to the data center business, the Group envisages smart real estate will bring about lucrative opportunities to its iEDS Solution and has rolled out strategic planning in advance. On 9 August 2017, the Company announced the strategic cooperation agreement with over 10 well-known real estate enterprises and related ancillary enterprises under which the Company will actively explore opportunities in the smart real estate field to expedite and enhance the application of the Group's "One-Stop Solutions for Intelligent Real Estate". The Group firmly believes that the smart city business will become a new driver enabling the Company to enlarge its market share and reinforce its leading advantages in the industry.

Meanwhile, the Group has an excellent track record in urban transit projects. Under the impetus of national policies, many cities nationwide are accelerating the construction of rail transit, which gives rise to robust demand for high-performance products that can fulfill the rail transit requirements in China. The Group has reached cooperation with globally renowned service providers of power distribution components to jointly explore opportunities in the urban rail transit market in China that will be worth a RMB1 trillion in aggregate. In the second half of 2017, the Group will actively participate in biddings for metro projects under construction in various cities by leveraging its strategic partners' notable edges in product performance and technology as well as its extensive project experience. The Group envisages that the urban rail transit segment will become an important driver that helps sustain the Group's strong sales performance in the second half of 2017.

Furthermore, the Group will continue to maintain its strategy to expand the overseas business rapidly, taking South East Asia, Africa and Middle East as its key development markets. The Group aims at securing more overseas orders through strengthening cooperation with long-term international customers, hence consolidating its firm footing in the international market. The Group has improved its strategic plan for various markets and will establish local subsidiaries as and when appropriate, in order to reduce the costs of business expansion and develop a global deployment mechanism that is sustainable, efficient, flexible and forward-looking.

Mr. Qian Yixiang, Chairman and CEO of Boer Power said, "Having experienced a relatively difficult adjustment cycle in 2016, the Group's business resumed growth in 1HY2017. The encouraging sales revenue has highlighted the Group's recovery from its trough. Areas ranging from sales revenue to net profit margin and optimization of assets and liabilities structure all exhibited significant improvements.

"Looking forward to the second half of 2017, the Group will continue our effective sales strategies to grow our revenue, and endeavor to enhance corporate internal management, collection of trade receivables. We aim at strengthening our profitability, seeking to improve our cash flow and asset-liability structure through implementing effective cost-saving measures to cut or control costs. In a nutshell, the management of the Group is optimistic about the growth potential in demand for intelligent electricity distribution products and energy-saving products in domestic and overseas markets. We are confident about sustaining the positive trend in our businesses achieved for the first half through better internal control and external expansion and achieving steady growth."

About Boer Power Holdings Limited (Stock code: 01685.HK)

Boer Power Holdings Limited provides high-end one-stop integrated electrical distribution system and solution design, manufacturing, sales and other value-added service. The company has over 30-years of professional experience and maintains a leading position in China's electrical distribution market with production bases in Wuxi, Yixing and Shanghai. The company's business covers EDS Solutions, iEDS Solutions, EE Solutions and CSP Business. The company focuses on self-developed intelligent and energy-saving products, and it collects data via Boer's "Smart Cloud" Mega Data Platform and develops comprehensive intelligent and energy saving solutions for various sectors, as well as provides long-term maintenance and consulting services for its customers, to further enhance their loyalty and the Group's business resilience. Its target market includes industries of telecommunications, data centers, medical services, infrastructure and new energy, etc.

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Source: Boer Power Holdings Limited
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