Harbin Electric expects a net loss of more than 4 billion yuan last year, and its stock price fell 20%

The Surging News reporter Yang Yang

Harbin Electric Co., Ltd. (Harbin Electric, 01133.HK), one of the largest manufacturers of power generation equipment in China, significantly expanded its 2021 annual performance loss. The company announced on the evening of January 19 that it expects to record a net loss attributable to owners of the parent company in the fiscal year 2021 of approximately RMB4 billion to RMB4.5 billion (the same period last year: a loss of RMB0.07 billion). Affected by the news of the huge pre-loss, as of noon on the 20th, the stock price of Harbin Electric has fallen by 20%.

Harbin Electric explained the performance loss that due to the reduction in demand in the traditional power generation equipment industry and the rise in raw material prices, product prices fell and costs increased, resulting in an increase in the company's loss contracts in the current period and to be executed, and the gross profit decreased significantly compared with the previous year. At the same time, the general contracting projects of overseas power station projects have generated large losses: first, due to the increase in the price of project construction materials, the increase in labor costs and construction costs caused by the new coronavirus epidemic, and the increase in project delay costs, the total cost of project implementation is expected to rise sharply; second, the general contracting projects of overseas power station projects are mostly settled in US dollars, and the continuous appreciation of the renminbi has led to a decline in the gross profit margin of the project. The announcement also said that the company deepened internal reform, retirees transferred to social management, a one-time accrual of retirees to coordinate external expenses, resulting in a year-on-year increase in management expenses in the current period.

Harbin Electric is a key backbone enterprise under the Central Pipe Enterprise Harbin Electric Group Corporation (hereinafter referred to as Harbin Electric Group), and is one of the largest power generation equipment manufacturing, complete sets and export bases in China, with products covering thermal power, hydropower, nuclear power, gas turbines, engineering contracting and other businesses. According to the company's official website information, in the field of thermal power, the thermal power products produced by Harbin Electric account for about one-third of the country's domestic installed capacity, and the products are exported to Pakistan, Vietnam, Russia, India and other countries, and the hydropower field is the main base for the production of hydropower equipment in the mainland, "At present, it has developed into a power generation equipment manufacturer dominated by coal power, hydropower, nuclear power, gas power and power station engineering general contracting, etc., with new environmental protection industries such as desulfurization and denitrification, seawater desalination and solar power generation as a breakthrough." ”

In recent years, Harbin Electric's performance has fluctuated sharply, especially by the impact of the epidemic. According to the financial reports of the past years, the company's net profit in 2016 was 413 million yuan, which fell to 194 million yuan in 2017, further shrank to 71.317 million yuan in 2018, and rebounded to 106 million yuan in 2019. In 2020, in the case of both revenue and production growth, the company said that due to the impact of the epidemic and the appreciation of the renminbi, gross profit declined, resulting in a net loss of more than 7 million yuan.

In terms of power generation equipment manufacturers of the same type as Harbin Electric, Dongfang Electric Co., Ltd. (Dongfang Electric, 600875) has not yet announced its 2021 annual performance forecast, and the third quarter report of last year showed that the company's net profit attributable to the mother in the first three quarters reached 1.866 billion yuan, an increase of 39% year-on-year.

Harbin Electric Group and Harbin Electric recently underwent high-level changes. On November 18, 2021, Cao Zhian, former general manager and deputy secretary of the party group of China Southern Power Grid Corporation, was appointed chairman of the board of directors and secretary of the party committee of Harbin Electric Power Group, and the former number one Szefu retired at an old age. A month later, Cao Zhian became the chairman of Harbin Electric, a listed company.

Editor-in-Charge: Li Yuequn