On May 16th, Huashang Energy (00206. HK) held its annual shareholders' meeting.
The company has been established for 30 years, facing a complex and ever-changing market environment. In recent years, with a "business transformation" card, it has targeted the low-carbon equipment market for new energy and IMO new rules for ship and sea support, and has won multiple orders for ship and sea support businesses such as sails and methanol fuel supply systems. With remarkable achievements, it has delivered a highlight of the 2024 annual "answer sheet".
Strengthening the financial foundation can also better empower business transformation.
In 2024, Huashang Energy increased its technological research and development efforts, continuously successfully developing new products, including high-quality products such as negative pressure vibrating screens, flexible hydrogen production power supplies, and alkaline electrolysis water hydrogen production equipment.
In the future, the company will also focus on promoting the research and development of projects such as wind sail technology, ammonia fuel supply system, marine crane prototype, offshore crane control system, and integrated development of frequency converters.
Stable revenue and record high gross profit margin
According to the 2024 financial report released by Huashang Energy, its gross profit reached 41.5 million US dollars in 2024, a year-on-year increase of 1%;
The gross profit margin increased from 22.6% in 2023 to 24.9% in 2024, reaching a new high;
The net profit margin has steadily increased to 5.5%, and the profit momentum continues to remain stable.
Regarding the increase in gross profit and gross profit margin, Huashang Energy explained in its financial report that it was mainly due to the high gross profit of land drilling equipment and services during the year, as well as the effective management of inventory and the reduction of related provisions.
In addition, in terms of liabilities, the company's debt ratio calculated by dividing total liabilities by total assets has decreased from 46.1% in 2023 to 42.2% in 2024.
Huashang Energy stated that it will continue to effectively manage funds, maintain sufficient funds and financial stability, and maintain a balance between business growth and risk management.
The overall revenue performance of Huashang Energy is also very stable.
During the reporting period, the company achieved a total operating revenue of $170 million, a net profit attributable to the parent company of $9.16 million, and a net cash flow from operating activities of $8.78 million.
The basic earnings per share are 0.29 cents, and the weighted average return on equity is 5.17%.
The proposal to distribute dividends at a rate of HKD 0.01 per share has been passed at today's annual general meeting, with an expected total dividend of approximately HKD 32.43 million, increasing returns to shareholders
From a business perspective, in 2024, Huashang Energy achieved $86.56 million based on equipment manufacturing and general contracting projects;
Supply chain and integration service revenue of 25.76 million US dollars;
The revenue from asset management and engineering services was 54.46 million US dollars, an increase of 7% year-on-year.
It is worth mentioning that the company has maintained profitability for the past six years, demonstrating its strong ability to resist risks and adapt to the market. This is a powerful proof of its precise decision-making and efficient execution in the process of business transformation.
When traditional businesses face challenges, the company actively adjusts its business structure, optimizes cost control, and provides a solid financial foundation for transformation and development.
Remarkable achievements, multiple flowering points promote growth
Another highlight of Huashang Energy's business development in 2024 is the significant transformation results.
This is also one of the main factors contributing to its improved profitability and quality performance.
The business transformation of Huashang Energy requires
Among them, hydrogen energy business, as one of the core directions of Huashang Energy's business transformation, achieved significant breakthroughs last year.
The "Research and Industrialization of Off Grid High Performance Alkaline Electrolysis Water Hydrogen Production Equipment" project of Huaxia Hydrogen Energy has won the gold medal in the Hong Kong TERA Award Smart Energy Innovation Competition and has also been successfully selected as a centralized procurement supplier for hydrogen production equipment by China Energy Construction Group.
This is not only a manifestation of technological strength, but also means that the company has firmly established a foothold in the mainstream hydrogen production equipment market.
The supporting business of ship and sea equipment is also showing new vitality in the transformation.
In terms of sail products, the wing shaped hard sail jointly developed with BAR Technologies has achieved a commercial breakthrough, signing more than ten sets of sales orders throughout the year, and reaching cooperation intentions with leading shipyards such as Shanghai Waigaoqiao Shipbuilding Co., Ltd. and Yangtze River Shipbuilding Group.
The Huashang Energy Wind Boosting Equipment Manufacturing Center currently has the ability to manufacture, assemble, and ship 36 sets of wind sails annually.
In the field of green fuel supply equipment, the company has established a new energy joint research and development center with China Merchants Jinling Dingheng Shipbuilding (Yangzhou) Co., Ltd. to accelerate the promotion of related projects and provide technical support for the green transformation of ship and sea business.
The company provides core equipment to numerous enterprises in the field of ship support, fully demonstrating its technological strength and product delivery capabilities.
At present, the upward cycle of the global shipbuilding market has brought unprecedented development opportunities for the shipbuilding supporting market. Against the backdrop of China's increasingly stable position as a world power in the shipbuilding industry, the high-end equipment industry of Chinese ships, as a key link in the industry chain, has also ushered in a broad window of opportunity. The company takes advantage of this opportunity to accelerate its progress on the road of business transformation.
Expanding into overseas markets is also an important part of the company's business transformation.
The cooperation with PEMEX, the national oil company of Mexico, has achieved significant results. Previously, the delivery of the first two drilling rigs for the land drilling project has been successfully completed and highly recognized. The overseas market influence has gradually increased, providing a broader international stage for the company's business transformation.
With the continuous growth of global energy demand, the global oil and gas market is gradually unleashing its development potential. Leveraging its successful experience in the PEMEX project, the company continues to expand its overseas business territory, accelerate its integration into the global energy market, and achieve international transformation of its business.
The core products of Huashang Energy have been successfully delivered.
In 2024, the company provided core equipment including electronic control, automation, pump sets, and catwalk machines for a 9000 meter drilling rig for a customer in Xinjiang.
In terms of lifting products, we have completed the delivery of various types of ship or platform cranes such as BOP cranes, innovative research and development of deployment and recovery systems, and wave compensation gangways, continuing to enrich our product line;
In terms of lifting system products, we have successfully delivered lifting systems for multiple large-scale offshore wind power installation platforms, ranking among the top two in terms of market share in China.
Seize the opportunity, have broad prospects, and a promising future ahead
The new energy related market sectors that Huashang Energy has turned to have even broader prospects.
In terms of the market for ship and sea supporting equipment, downstream shipyards are affected by IMO decarbonization policies and are updating their old fleets. Shipowners are constantly promoting green ship construction and seeking clean energy fuels, including LNG, green methanol, ammonia, etc. Mainstream shipyards have full orders, and new shipbuilding prices are still high.
According to Clarkson data, as of early April this year, there were a total of 3583 shipyard orders (93.3 m. CGT) in China. Among them, orders from shipyards such as Yangtze River Shipbuilding, Jiangnan Shipbuilding, and Yangzhou COSCO Shipping Heavy Industries have been scheduled for after 2029.
The latest data from DNV AFI (Alternative Fuel Insight) platform shows that in March of this year, a total of 25 new orders for ships powered by alternative fuels were placed, including 12 methanol fueled ships and 7 LNG fueled ships.
Among the new orders, 41.59% of the ships use alternative fuels in terms of total tonnage.
From the perspective of the operation and new orders for alternative fuel ships, whether it is LNG, methanol, or ammonia, they have all been increasing year by year.
This means that shipyards have a relatively definite demand for green fuel supply systems in the short term, and there is still room for improvement in future demand.
Hydrogen energy has become a "rising star" in the development of clean energy in recent years.
In 2024, hydrogen energy was first included in the government work report.
The first Energy Law of the People's Republic of China, which was officially passed in November 2024 and implemented on January 1, 2025, explicitly included hydrogen energy in the energy management system for the first time.
Since 2024, the construction of green hydrogen energy projects has also experienced explosive growth.
In the context of such industry development trends, Huashang Energy's new energy and ship sea supporting equipment businesses are clearly "riding the east wind".
To better seize this market opportunity, Huashang Energy has formulated a clear and forward-looking development path.
In terms of deepening and expanding core business, Huashang Energy focuses on the field of ship and sea support, fully promoting the research and development of projects such as wind sail technology and ship crane prototypes, actively introducing cutting-edge technologies such as artificial intelligence and 5G, continuously strengthening existing business advantages, and achieving the transformation and upgrading of traditional businesses.
In the expansion of green energy business, the company is fully committed to building the full industry chain capability of hydrogen energy, and plans to complete the commercial verification of a series of large-scale standard electrolytic cells.
By focusing on hydrogen production equipment, green energy project investment, and other core businesses, diversified investment and joint venture cooperation have been carried out to build a sound ecological cooperation system, laying a solid foundation for the company's long-term development in the field of green energy.
In terms of global layout and technological innovation, Huashang Energy relies on its overseas subsidiaries to build a global service center system, strengthen the construction of overseas service stations, accelerate the landing of clean energy equipment orders, and especially increase the market promotion of hydrogen production equipment;
Continuously increasing research and development investment, focusing on key technology areas such as deep-sea power sources and flexible hydrogen production, deepening cooperation with scientific research institutions, and actively participating in national demonstration projects.
This series of measures not only helps the company seize international market opportunities in the wave of global energy transformation, but also drives business transformation through technological innovation, enhancing the company's competitiveness in the global green energy field.
It is worth noting that Huashang Energy relies on the "investment promotion system", and China Merchants Group is promoting the century old "investment promotion" giant ship, accelerating the "third entrepreneurship".
In the "Investment Promotion System", China Merchants Innovation Technology was established in December 2023, undertaking the responsibility of building the "Fourth Industry Sector" of China Merchants Group. This sector will focus on breakthroughs in strategic emerging industries and core supporting marine equipment;
China Merchants Industry has listed ship and sea supporting services as one of its strategic backbones for development.
With strong support from shareholder units, Huashang Energy will usher in unprecedented development space. Through collaborative innovation, it is expected to further enhance the company's technological innovation capabilities and market competitiveness.
In the new stage of transformation and development, Huashang Energy emphasized at the 2025 work conference that it will closely follow the strategic pace of China Merchants Group, clarify its development positioning, optimize its business structure, fully promote high-end, intelligent, and green transformation, actively forge Huashang Energy's advanced manufacturing capabilities, cross cycle capabilities, and industrial control capabilities, and contribute Huashang Energy's strength in the new journey of China Merchants Group's "third entrepreneurship" and China Merchants Industry's "rebuilding a new China Merchants Industry".
According to the financial report of Huashang Energy, looking ahead to the future, 2025 is the year of strategic transformation for Huashang Energy.
Faced with the three major development trends of intelligence, low carbonization, and internationalization, the Huashang Energy team will seize the opportunities brought by the adjustment of the "Science and Technology Innovation Industry" sector of China Merchants Group with firm strategic determination and agile execution ability.
Standing at the forefront of the energy revolution and continuously pushing the company towards the goal of becoming a global leader in green technology;
Continuously creating sustainable value for shareholders, customers, and society, and jointly writing a new chapter in the development of Huashang Energy.