Boer Power Announces 2018 Interim Results, Business News

PUBLISHED ONAugust 16, 2018 11:10 AM

Profitability steadily grew with financial positions continued to improve

Revenue from sales of Energy Efficiency Solutions increased by 36.7% year-on-year to approximately RMB128.0 million which represented 32.9% of total revenue.
Due to the increase in the proportion of high-margin projects, the gross profit grew to RMB119 million, increasing by 6.8% year-on-year, and the gross profit margin increased to 30.7%, rising by 2.2 percentage points year-on-year.
Excluding the effect of a one-off substantial impairment provision for trade and other receivables, of which revenue was recognized before 2016, the adjusted operating profit and the adjusted profit before taxation improved significantly by 79.6% and 353.3% year-on-year to RMB60.366 million, and RMB34.629 million respectively.
Through continuous stringent internal control system and strengthened the collection of the receivables, the assets and liabilities structure delivered significant improvement. As the finance costs steadily reduced, the operating cash flow has significantly increased to approximately RMB135 million.
As at 13 August, 2018, the Group received over RMB61.223 million from customers for settlement of outstanding trade receivables, loans to customers, retention receivables and bills as at 30 June 2018.

HONG KONG, Aug. 16, 2018 /PRNewswire/ -- 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 2018 (the "Period" or "1H2018").

Profitability steadily grew with operating cash flow significantly increased

The Group delivered continuous improvement on its business during 1H2018. Thanks to the continuous support by its long-term customers, the Group has won various bids with its reputable "One-stop Data Center Solution", driving the Group's overall gross profit margin. Due to the increase in the proportion of high-margin projects, the gross profit grew by 6.8% year-on-year to RMB119 million, and the gross profit margin increased by 2.2 percentage points year-on-year to 30.7%.

During the Period, through the reduction of production costs and management fee resulted from effective refined management, excluding the effect of a one-off substantial impairment provision for trade and other receivables, of which revenue was recognized before 2016, the operating profit and the profit before taxation improved significantly by 79.6% and 353.3% year-on-year to RMB60.366 million, and RMB34.629 million respectively.

The tightening of monetary policies of China implemented in recent years has indirectly slowed down the collection of trade receivables by the Group during the Period. Nevertheless, through stringent internal control system and strengthened the collection of the receivables, the assets and liabilities structure and cash flow level delivered significant improvement during the Period. The operating cash flow has significantly increased to RMB135 million. Besides, as at 13 August, 2018, the Group's account receivables as at 30 June 2018 further reduced by RMB61.223 million.

Apart from predominant position in data centers, Boer Power's products and services continued to broaden

As at 30 June 2018, the business of the Group can be divided into the following four segments, namely Energy Efficiency Solutions ("EE Solutions"), Intelligent Electrical Distribution System Solutions ("ideas 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, infrastructure, telecommunications, rail transit, new energy and hydraulic engineering, all of which were non-factoring sales.

Thanks to outstanding technical advantages and reputable products and services, the Group's "One-stop Data Center Solution" has been applied to many national and regional symbolic data center projects. In 1H2018 and in July, the Group continued to be trusted by China Telecom and GDS, being long-term customers, and once again collaborated in various projects, among which China Telecom will apply the intelligent power distribution components marked with the Group's self-owned brand in its data centers nationwide and adopt the Group's low-voltage intelligent power distribution solutions for its construction projects in Shanghai, Guangdong, Shaanxi, Yunnan and Shanxi. Subsequently in July, the Group also provided a construction project of low voltage intelligent power distribution solutions of a newly developed Waigaoqiao Data Center located in Shanghai for GDS, another long-term customer.

During the Period, Boer Power's products and services extended to various aspects through engagements by customers. The Group provided China Life Insurance with the full-cycle products and a full range of services of Boer "Cloud+"in a Jinan project, fully manifesting the intensive added value in the integration of cloud platform and intelligent power distribution solutions of Boer Power. In addition, in early August, the Group further collaborated with Qingdao Metro on the Line No. 1 project to provide low-voltage environmental-controlled switchgear for the project, representing the successful extension of the Company's product line to the sector of electromechanical product of urban rail transit.

Quality customer base steadily grew at home Overseas expansion saw satisfactory results

Against the backdrop of manufacturing upgrade, the growth of demand of smart factories for the safe, reliable and energy efficient electricity distribution and maintenance has become prominent, opening favourable opportunities for Boer Power to extend its quality customer base. In 1H2018, the Group successfully won the bidding on a construction project of a Chinese solar enterprise with leading technology and scale in the world. Meanwhile, the Group has continued to maintain good terms with its existing customers. During the period, the Group has continued the long-term stable relationships with high-quality and large-scale international brands and Fortune Top 500 companies including Anheuser-Busch InBev, Global Data Solutions, Centrin Data Systems, Suez Water and China Mobile, etc. to further deepen the business between the Group and its high-quality and largescale customers.

In terms of overseas business, the increasing investment from Chinese companies in the areas along the "Belt and Road" offer the vast market potentials to the Group's intelligent transmission and distribution products and services. During the Period, the Group independently won the bidding on the largest cooperation project between China and Russia in the non-energy fields, the forestry-pulp-paper integration project in Amazar, Russia, providing integrated solution for low-voltage intelligent power distribution.

In addition, during the Period, the Group actively seized the business opportunities in overseas markets through its branches established in Spain, Mexico, Indonesia and the United Arab Emirates. It also cooperated with major domestic and foreign contractors to provide the expansion project of the international airport of Male, the capital of Maldives, as well as various large-scale projects in Algeria, Angola, Russia, Congo(Kinshasa), Pakistan and Cambodia with the Group's intelligent power distribution products and integrated solutions.

Mr. Qian Yixiang, Chairman and CEO of Boer Power said, "Thanks to the proven strategies such as penetration in data centers and overseas markets, long-standing quality customer base as well as reputable products and services, Boer Power has continued to thrive through the trying period. During 1H2018, areas ranging from sales revenue to net profit margin and optimization of assets and liabilities structure all exhibited significant improvement.

In the second half of 2018, the Group will continue to focus on restoring sales scale and optimizing sales structure to increase the proportion of high-margin projects, and continuously strengthen the internal control and collection of accounts receivable; the production costs and management fee will be continuously reduced through refined management, and the financial costs can be reduced by asset structure optimization, therefore the Group is expected to further improve the profitability to expand the profits and create greater value for shareholders."

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 maintain 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 "Cloud Smart" data platform and develops comprehensive intelligent and energy saving solutions for various sectors. The Company also provides long-term maintenance and consulting services, to further enhance customer loyalty and the Group's business stability. Its target industries embrace telecommunications, data centres, medical services, infrastructure, new energy and more.

Please find more information on the Company's website at https://www.boer-power.com