China Satcom's profit halved despite revenue growth in H1 2025

China Satellite Communications (China Satcom) announced a 6.33% increase in operating revenue to 1.22 bn yuan for the first half of 2025. However, the company reported a 50.25% drop in total profit to 264.07m yuan and a 55.59% decrease in net profit attributable to shareholders to 180.51m yuan. This profit decline is largely attributed to a satellite insurance claim recognized in the prior year. Operating costs rose by 9.06% due to increased depreciation from new satellites and insurance expenses.

The company's total assets grew by 1.79% to 22.81 bn yuan. Cash and cash equivalents decreased by 1.71 bn yuan to 2.16 bn yuan, mainly due to increased cash payments for investments, particularly in wealth management products, which saw an increase of 1.4 bn yuan. Receivables also saw a substantial increase, influenced by customer payment patterns.

In related news, China Satcom's controlling shareholder, China Aerospace Science and Technology Corporation (CASC), completed the issuance of convertible bonds in August 2024, with a principal of 6.1 bn yuan. The bonds, which became convertible into China Satcom shares in March 2025, are not expected to change CASC's controlling stake. Additionally, an independent risk assessment of China Aerospace Science and Technology Finance Co., Ltd. found its internal control and risk management systems to be sound, with all regulatory indicators met. China Satcom's deposits with the financial company totaled 1.1 bn yuan, representing 22.29% of its total deposits, with no outstanding loans.