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Xu Yang, reporter of Yangtze Business Daily Pentium News

State Grid Information and Communications Technology (600131.SH)'s performance is under short-term pressure.

On the evening of July 22, State Grid Information and Communications Technology announced that from January to June 2024, the company's total operating revenue was 2.682 billion yuan, a decrease of 5.09% from the same period last year; the net profit attributable to shareholders of listed companies (referred to as "net profit") was 232 million yuan, a decrease of 6.95% from the same period last year. The decline in net profit was mainly due to the year-on-year decline in total profit.

The announcement shows that from January to June 2024, the total profit of State Grid Information and Communication was 224 million yuan, a year-on-year decrease of 11.45%, mainly due to non-operating income such as assets obtained in exchange for debts in kind from winning the Guanglin case in the same period last year.

The reporter from Pentium News of the Yangtze Business Daily noticed that judging from the single-quarter performance, State Grid Information and Communications performed very well in the second quarter of this year.

In the first quarter of this year, the company achieved operating income of 1.019 billion yuan and net profit of 12.1 million yuan. Based on this, in the second quarter, the company achieved operating income of 1.663 billion yuan, a year-on-year increase of 10.66%; net profit of 220 million yuan, a year-on-year increase of 24.01%. The second quarter's revenue and net profit will both record positive growth year-on-year and quarter-on-quarter.

It is understood that the predecessor of State Grid Information and Communication was Minjiang Hydropower. Since the completion of a major asset reorganization in 2019, the company has four wholly-owned subsidiaries, namely, China Electric Power Puhua, Jiyuan Software, China Electric Power Feihua, and China Electric Power Venusstar. Against the backdrop of the country's "energy digital transformation" and "dual carbon" goals, the company focuses on three major business sectors: cloud network infrastructure, power digital services, and enterprise digital services.

From 2019 to 2023, State Grid Information and Communication's total operating revenue has remained at the 7 billion yuan platform for five consecutive years, with corresponding annual net profits of 487 million yuan, 607 million yuan, 677 million yuan, 801 million yuan and 828 million yuan respectively, a year-on-year increase of 19.25%, 24.62%, 11.57%, 18.27% and 3.43%, and its operating performance has been stable and improving.

The reporter of Yangtze Business Daily Pentium News found that State Grid Information and Communication continued to accelerate the research and development of key core technologies, assisted business development, and opened up the company's growth space. The R&D investment from 2020 to 2023 was 413 million yuan, 508 million yuan, 599 million yuan, and 654 million yuan respectively. The cumulative R&D investment in four years reached 2.174 billion yuan, and the corresponding proportion of operating income was 5.90%, 6.81%, 7.87%, and 8.52%, respectively. The proportion continued to increase. As of the end of 2023, there were 723 R&D personnel, accounting for 58.5% of the total number of employees in the company.

With continued increase in R&D investment, the comprehensive gross profit margin of State Grid Information and Communication has maintained a steady upward trend. From 2019 to 2023, the company's comprehensive gross profit margin has risen from 18.54% to 21.56%, an increase of 3.02 percentage points in four years. However, in the first quarter of 2024, the company's comprehensive gross profit margin fell to 17.76%.

Despite the current performance pressure, State Grid Information and Communication Corporation remains confident about its development in 2024 with its clear strategic layout and solid business foundation, and aims to achieve annual operating revenue of 8.49 billion yuan.

It is worth mentioning that SGCC attaches great importance to investor returns. From 2019 to 2023, the corresponding annual cash dividends will be 149 million yuan, 185 million yuan, 203 million yuan, 241 million yuan, and 249 million yuan, showing an increasing trend year by year, and the annual dividend rate will exceed 30%.