China Communications Services Corp. Ltd. Class H · HKEX:552
China Communications Services Corp. Ltd. Class H — H1 2024 Earnings Presentation
35 slides from China Communications Services Corp. Ltd. Class H's earnings presentation, Aug 27, 2024
Slide 1: 2024 Interim Results
CHINA COMMUNICATIONS SERVICES CORPORATION LIMITED Stock Code : 00552.HK PENETRATING STRATEGIC EMERGING INDUSTRIES ACHIEVING HIGH-QUALITY SUSTAINABLE DEVELOPMENT 2024 Interim Results 27 August 2024 www.chinaccs.com.hk
Slide 2: Management Present
Management Present EXECUTIVE DIRECTOR, MR. LUAN XIAOWEI CHAIRMAN EXECUTIVE DIRECTOR, MR. YAN DONG PRESIDENT EXECUTIVE DIRECTOR, MR. SHEN AQIANG EXECUTIVE VICE PRESIDENT & CFO EXECUTIVE VICE PRESIDENT MR. ZHANG HAO 2
Slide 3: Agenda
Agenda Overview Business Financial Review Results 3
Slide 4: Overview
Business Financial Overview Review Results
Slide 5: Highlights
Highlights Responding to External Changes Effectively and Achieving Steady Yet Enhanced Operating Results Implementing Quality and Efficiency Improvement Measures, Gross Profit Margin Continued an Upward Trend Achieving Remarkable Results in Strategic Deployment, Strategic Emerging Businesses Led Ov
Slide 6: Results Overview (1): Overall Results were Steady with Favorable Trend
Results Overview (1): Overall Results were Steady with Favorable Trend Achieved “Effective Improvement in Quality, Reasonable Growth in Quantity” Net Profit2 Gross Profit Margin Revenue Continued its Positive Recovery Growth Rate was Higher than Grew Steadily Revenue Growth by 2.7 pp Trend in Recent
Slide 7: Results Overview (2): Steady Business Development with Enhancement
Results Overview (2): Steady Business Development with Enhancement Seized the Opportunities from AI Computing Power Construction, In-depth Development of Digital Transformation, and Green Transformation Revenue Growth – By Market Revenue Growth – By Business (RMB’M) (RMB’M) +1.7% +1.7% +409 74,412 +
Slide 8: Results Overview (3): Significant Enhancement in Business Quality
Results Overview (3): Significant Enhancement in Business Quality Profit Growth Reached Double Digits By market and business, domestic non-operator market and ACO business were the revenue growth drivers respectively, both of their gross profit margins improved Domestic Non-operator Market ACO Busin
Slide 9: Strategic Emerging Businesses (1): Reaped Remarkable Results in Deployment
Strategic Emerging Businesses (1): Reaped Remarkable Results in Deployment, New Momentum Formed Strategic Emerging Businesses Became the Major Driver of New Contract Growth Further Acceleration in Strategic Emerging Industries Deployment, Formation of New Quality Productive Forces Expedited Strategi
Slide 10: Strategic Emerging Businesses (2): Seizing Ample Opportunities in Four Sectors
Strategic Emerging Businesses (2): Seizing Ample Opportunities, Strengthening and Optimizing our Development in Four Sectors Target Specific Scenarios and our Advantageous Sectors for Deep Cultivation and Penetration Green and New Contracts New Contracts Emergency Management New Contracts Low-carbon
Slide 11: Insisting on Technological Innovation as Our Core
Insisting on Technological Innovation as Our Core and Developing Core Products Consistently Technological Innovation Constantly Technological Innovation Results Technological Innovation Capability Reaping Benefits Emerging Continuously Recognized by Industry ⚫ New contracts of ACO business increased
Slide 12: Persisting in High-quality Development and Strengthening Competitive Advantages
Persisting in High-quality Development and Strengthening Competitive Advantages Adhere to the Positioning of “1 Positioning, 4 Roles1”, Continuously Deepen the Enterprise Reform and Transformation, and Accelerate the Cultivation of New Quality Productive Forces Strengthening Competitive Advantages a
Slide 13: Business Review
Overview Financial Business Results Review
Slide 14: Business Revenue Breakdown
Business Revenue Breakdown (RMB’M) 1H2023 1H2024 Change % % of Revenue TIS (Telecommunications Infrastructure Services) Design 5,200 5,013 -3.6% 6.7% Construction 30,417 30,577 0.5% 41.1% Highest Supervision 2,071 2,076 0.3% 2.8% Incremental Subtotal 37,688 37,666 -0.1% 50.6% Contribution BPO (Busin
Slide 15: Overall Performance by Business and Market
Overall Performance by Business and Market By Business By Market (RMB’ M) +1.7% (RMB’ M) +1.7% 73,170 74,412 73,170 74,412 1,570 +26.0% 1,979 13,753 +6.0% 14,583 Overseas Customer 31,623 +2.5% 32,409 22,163 ACO Domestic 21,729 +2.0% Non-operator BPO 14,154 -8.6% 12,943 Domestic Operator TIS China Mo
Slide 16: Domestic Non-Operator Market (1)
Domestic Non-Operator Market (1): Achieved Continuous Enhancement in Efficiency and Remarkable Scale Development in Multiple Industries Focus on Industries such as Government, Emergency Management, Transportation, Energy and Education, and Expand Businesses such as Industrial Digitalization, Photovo
Slide 17: Domestic Non-Operator Market (2)
Domestic Non-Operator Market (2): Strengthened the Penetration of Strategic Emerging Industries and Achieved Notable Increase in Sizable Projects With Thousands of Industries Accelerating the Upgrade of Digital Transformation, the Trend of Intelligentization, Greening and Security Brings Ample Room
Slide 18: Domestic Operator Market
Domestic Operator Market: Actively Responded to Changes in Operating Environment, Our Overall Situation Remained Largely Stable Focus on New Transformation Needs such as AI Computing Power Construction and Industrial Digitalization Revenue Growth Drivers (RMB’M) +0.1% +384 -103 39,977 -234 40,024 ⚫
Slide 19: Overseas Market: Strengthened Market Expansion Continuously
Overseas Market: Strengthened Market Expansion Continuously Achieved Steady Progress of Project Implementation in Communications, New Energy and Informatization Construction Revenue Overseas Market Opportunities With our favorable business development in the Middle East, Asia Pacific and other reg
Slide 20: Strategic Emerging Businesses (1): Digital Infrastructure
Strategic Emerging Businesses (1): Digital Infrastructure New Contracts in Seizing the Demand of Large Language Model and Cloud Computing, 1H2024 Grew by Digital Infrastructure Business Achieved Rapid Growth over 35% Leveraging the Integrated Service Capabilities of Full-process Consultation, Design
Slide 21: Strategic Emerging Businesses (2): Green and Low-carbon
Strategic Emerging Businesses (2): Green and Low-carbon New Contracts in Seizing the Opportunities from New Energy Construction and Energy Usage 1H2024 Grew by Services, Green and Low-carbon Business Achieved Rapid Growth over 60% Under the Guidance of the National “Dual Carbon” Strategy, We not onl
Slide 22: Strategic Emerging Businesses (3): Smart City
Strategic Emerging Businesses (3): Smart City New Contracts in Grasping the Opportunity of Digital China Construction, a Series of Smart City 1H2024 Grew by Applications Achieved Rapid Growth over 40% Led by Top-level Planning of Smart City, We Empower Smart Government Affairs, Urban Governance, Ind
Slide 23: Strategic Emerging Businesses (4): Emergency Management & Security
Strategic Emerging Businesses (4): Emergency Management & Security New Contracts in Forging Core Products for Cybersecurity and Emergency Management 1H2024 Grew by over 40% Cybersecurity Emergency Management We expanded into national key information infrastructure in a large scale, covering We devel
Slide 24: Deploying in New Sectors of Strategic Emerging Industries
Deploying in New Sectors of Strategic Emerging Industries to Achieve Sustainable Development Market Potential for Digital Infrastructure, Green and Low-carbon, Industrial Digitalization and AI Continues to Expand Market Potential for Customers’ Demand for Penetration of Digital Intelligence Service
Slide 25: Financial Results
Overview Business Review Financial Results
Slide 26: Key Financial Indicators
Key Financial Indicators (RMB’M, Except EPS) 1H2023 1H2024 Change % % of Revenue Revenue 73,170 74,412 1.7% 100% Cost of Revenue 65,336 66,296 1.5% 89.1% Direct Personnel Costs 3,871 3,808 -1.6% 5.1% Materials Costs 11,886 12,337 3.8% 16.6% Direct Cost of Products Distribution 1,683 1,098 -34.7% 1.5
Slide 27: Operating Efficiency
Operating Efficiency Gross Profit Margin Improved Continuously in Recent Years Implemented Focused on enhancing core 11.0% High-quality competencies and 10.9% Development strove to expand into high- 10.7% 10.7% Strategy value sectors 10.5% 1H2020 1H2021 1H2022 1H2023 1H2024 Strengthened technologica
Slide 28: Cost Structure
Cost Structure Cost/Expense as a % of Revenue Direct Personnel Costs ⚫ Controlled the total number of employees to enhance as a % of Revenue labor productivity Direct Personnel 5.3% -0.2pp 5.1% Continued to Decline Costs Materials Costs 16.2% 16.6% ⚫ By implementing centralized procurement and +0.4p
Slide 29: Free Cash Flow
Free Cash Flow Free Cash Flow (RMB’M) Overview: 6,960 5,455 ⚫ Free cash flow showed cyclical pattern in the first and second half of the year ⚫ In 1H2024, accounts receivable increased to a certain extent, and the net outflow of free cash flow increased 1H2022 1H2023 1H2024 Overall Risk of Accounts
Slide 30: Financial Position
Financial Position (RMB’M) 31.12.2023 30.6.2024 Total Assets 121,790 128,202 In which: Cash and Deposits1 35,460 30,874 Accounts Receivable and Contract Assets 52,505 60,961 Total Liabilities 78,122 83,354 In which: Accounts Payable and Contract Liabilities 62,954 66,645 Interest-bearing Liabilities
Slide 31: Market Capitalization Management
Market Capitalization Management Realizing High-quality Operating Results, Creating Better Returns for Shareholders, and Promoting Value Enhancement in the Capital Market Facing Vast Market Opportunities from Digitalization, Intelligentization and Greening Solid Financial Position Supports the Compa
Slide 32: Thank You!
Corporate Governance Asia “14th Asian Excellence Award” ⚫ Asia’s Best CEO ⚫ Asia’s Best CFO ⚫ Best Investor Relations Company ⚫ Sustainable Asia Award Institutional Investor “2024 Asia Executive Team Rankings” ⚫ Most Honored Company ⚫ Telecommunications (Small & Midcap) ⚫ Best CEO ⚫ Best CFO ⚫ Best
Slide 33: Appendix
Fe Te ik 1S RH CHINA COMSERVICE 1 @ Appendix —————— ae
Slide 34: Business Revenue Breakdown – by Market
Business Revenue Breakdown – by Market (RMB’M) 1H2023 1H2024 Change Change % TIS (Telecommunications Infrastructure Services) Domestic Operator 19,929 20,313 384 1.9% Domestic Non-operator 16,528 15,933 -595 -3.6% Overseas Customer 1,231 1,420 189 15.4% Subtotal 37,688 37,666 -22 -0.1% BPO (Business
Slide 35: Forward-looking Statement
Forward-looking Statement The Company would like to caution readers about the forward-looking nature of certain statements herein. These forward-looking statements are subject to risks, uncertainties and assumptions, which are beyond its control. Potential risks and uncertainties include those conce
China Communications Services — H1 2024 Earnings Presentation on 6ix