VPower Group International Holdings Limited

Sources. FY2021–FY2022: FY2022 annual results announcement (19 Apr 2023). FY2023–FY2024: FY2024 annual results announcement (28 Mar 2025). FY2025: FY2025 annual results announcement (24 Apr 2026). All figures are HK$ M.

Income statement

Notes on the table:

Operating income: is gross profit plus other income, minus S&D, administrative, ECL and other expenses. It reconciles to reported pre-tax income once finance costs and JV share are added back (checked for all five years).

D&A: is depreciation of PPE plus depreciation of right-of-use assets plus amortisation. FY2023 excludes amortisation, which was not disclosed in the source reviewed.

EBITDA: excludes impairments only where they sit inside operating income. FY2023 EBITDA is therefore distorted by the HK$1,169.3 M ECL charge.

FY2021 DPS: is the interim dividend of 0.75 cents (with scrip alternative). The FY2020 final of 3.45 cents was paid in 2021 but relates to FY2020.

Margins and growth

FY2021 growth uses FY2020 revenue of about HK$3.39 bn, a secondary-source figure (TipRanks).

Revenue CAGR, FY2021 to FY2025: -30.3% per year (derived: HK$1,202.7 M / HK$5,094.1 M over 4 years).

Longer history (secondary/partial):

Sources: FY2017 and FY2019 results announcements. FY2018–FY2020 revenue is rounded from TipRanks.

Balance sheet

Notes:

• The company reports FY2022 net debt as HK$2,763.9 M. The difference from the derived figure is that the company also deducts restricted cash and pledged deposits.

• FY2025 receivables include HK$217.4 M of non-current originated credit-impaired receivables.

H1 2026 balance sheet (30 Jun 2026, unaudited):

• Total assets HK$5,535.5 M; cash HK$307.4 M.

• Borrowings HK$1,657.0 M, of which HK$1,639.7 M is current and HK$1,477.6 M is in repayment default.

• Net current liabilities HK$448.0 M; total equity HK$1,382.8 M.

• Net gearing 95.3%; liabilities-to-assets ratio 75.0%.

Cash flow

Notes:

Operating cash flow: The FY2025 going-concern note states net operating cash outflows of HK$222.7 M, while the auditor's extract states HK$212.2 M. The discrepancy is noted and has not been resolved. Operating cash flows for FY2021–FY2024 were not contained in the results announcements reviewed (not publicly disclosed in reviewed sources).

Dividends recognised in 2021: were HK$91.0 M (FY2020 final) plus HK$20.1 M (FY2021 interim). Both had a scrip alternative, so cash paid was lower but not disclosed.

Buybacks: Filings state no repurchases in FY2022–FY2025.

Equipment-sale proceeds: for FY2025 combine HK$652.0 M (Batch 1, received 2 Jan 2025), HK$713.8 M (Batch 2) and HK$92.6 M (part of Batch 3) — a derived sum.

Ratios (analyst-computed)

Notes:

• FY2023 net debt / EBITDA is not meaningful because EBITDA was negative.

• Days ratios use year-end balances. DSO includes non-current credit-impaired receivables in FY2025.

Commentary on trends, inflections and drivers

Revenue: three regimes.

1. FY2021 peak (HK$5.1 bn). Revenue was inflated by SI construction services tied to building the Myanmar JV plants.

2. FY2022–FY2023 collapse (-34% and then -55%). SI construction ended, the Myanmar business deteriorated after the coup, and Peru was deconsolidated in June 2022.

3. FY2024–FY2025 stabilisation and shrinkage (HK$1.5 bn, then HK$1.2 bn). IBO grew modestly while SI fell a further 59% in FY2025 on working-capital and supply constraints.

H1 2026 revenue of HK$620.1 M (+1.3% YoY) suggests FY2026 revenue in the HK$1.2–1.3 bn range. That is an analyst inference, not guidance.

Profitability: FY2023 was the reckoning. In FY2023 VPower recognised:

• HK$1,168.3 M of trade-receivable impairment, overwhelmingly Myanmar-related;

• HK$705.9 M share of JV losses (CNTIC VPower);

• a negative SI gross margin; and

• about HK$100 M of asset write-offs and impairments.

The FY2023 loss of HK$2.85 bn wiped out about 40% of opening equity. Since then, losses have been about HK$200–230 M per year. Underlying operations are barely profitable: EBIT was HK$46.5 M in FY2025, and that relied heavily on HK$164.5 M of gains from selling fleet assets to CNTIC. Excluding disposal gains, FY2025 EBIT would have been negative (about -HK$118 M, derived). H1 2026 swung to a HK$41.0 M loss once disposal gains disappeared, finance costs rose 33.9% and IBO margins fell.

Leverage: debt is down, cash flow has not improved. Gross borrowings fell from HK$3.85 bn (FY2021) to HK$1.62 bn (FY2025). This was achieved mainly through the following, not through operating cash flow:

• deconsolidating Peru, including its senior notes;

• the 2023 CNTIC equity injection; and

• about HK$1.46 bn of equipment-sale proceeds from CNTIC in 2025.

Interest coverage of 0.15x in FY2025 and an operating cash outflow show the business cannot service its remaining debt unaided. The average borrowing rate increased in H1 2026, consistent with default interest.

Working capital: receivables are the core balance-sheet risk. Net receivables of HK$1.66 bn compare with an equity base of HK$1.40 bn. HK$1.44 bn of FY2025 net receivables were over 360 days old, and HK$1.29 bn still were at 30 June 2026. A cash conversion cycle above 500 days is unsustainable. Recoverability, which is likely linked to Myanmar off-takers, is the swing factor. The HK$97.1 M impairment reversal in H1 2026 shows collections are possible but lumpy.

Management guidance (H1 2026 interim, 24 Aug 2026)

SI: expected to remain under pressure in H2 2026 given gen-set inventory and replenishment lead times. The focus is on rebuilding supplier relationships, data-centre and computing opportunities, and premium customers.

IBO: localised development, parent synergy, and a steady advance in Southeast Asia, Central Asia and South America. New projects carry an earnings time lag. Cross-regional leasing of idle gen-sets is being evaluated.

Group: addressing debt pressure through a scheme of arrangement. Prudently optimistic on the long-term distributed-energy market.

No quantitative guidance: is given.

Consensus: not available (no active coverage identified).

Bull case

1. A scheme crystallises debt relief. The lapsed Restructuring Master Agreement envisaged restating HK$2,077 M of offshore debt to about HK$1.38 bn, roughly a one-third haircut. A comparable scheme, backed by CNTIC credit support, would cut finance costs (HK$304.7 M in FY2025) and could restore positive pre-tax earnings, given IBO segment results of about HK$117–179 M per year.

2. Hidden assets re-rate.

   • The Myanmar JV (HK$700.4 M cost, carried at nil) restored 500 MW.

   • The Tamar Fund (carrying value HK$702.6 M) is monetising.

   • Receivables of HK$1.29 bn over 360 days old are partly recoverable; H1 2026 already reversed HK$97.1 M of impairment.

   • Against a market cap of about HK$0.43 bn, these are large relative values.

3. A parent-driven Central Asian pipeline. Uzbekistan (100 MW) and Kazakhstan (22 MW) are proof points. Genertec's network and SOE financing could scale IBO capacity in gas-rich, grid-weak markets while data-centre demand lifts SI.

Bear case

1. Equity is structurally subordinated. Borrowings of HK$1.66 bn sit in default, alongside other payables and accruals of HK$1.63 bn and a disputed CRRC claim. Interest coverage is 0.15x. A scheme could involve debt-for-equity conversion that heavily dilutes minorities. A failed scheme could lead to a winding-up order.

2. Earnings quality is poor. FY2024 and FY2025 relied on HK$94.6 M and HK$164.5 M of disposal gains from fleet sales to the parent. Without them, H1 2026 shows a loss even after a HK$97.1 M impairment reversal. IBO gross margin fell to 13.3%.

3. Concentration and execution. 64.5–74.6% of revenue comes from one Brazilian customer. SI is starved of capital and engines. Repeated reporting delays and suspensions (2023, 2024, 2026) signal governance and control fragility.

Catalysts and monitorables (next 12 months)

Analyst verdict

VPower is no longer an operating-growth story. It is a restructuring situation wrapped around a modest but real distributed-power franchise.

The franchise has substance. Brazil generates more than HK$900 M of annualised revenue. Indonesia, Uzbekistan and the incoming Kazakhstan asset provide diversification. The fleet's mobility has already allowed an orderly retreat from Myanmar. Under CNTIC/Genertec control, the strategic logic is coherent: VPower becomes the listed distributed-generation arm of a central SOE with Belt-and-Road reach.

The capital structure is broken. Substantially all bank debt is overdue. Finance costs consume six times FY2025 operating profit. Operating cash flow is negative. Two consensual restructuring attempts have failed, and a creditor petition remains live. Recent "profits" depended on selling assets to the parent and leasing them back. That source of cash is finite: about HK$249 M of equipment remains held for sale.

For equity holders, the outcome is binary and largely outside the company's control. It hinges on the scheme terms (to be revealed from the 21 October 2026 hearing onward) and on CNTIC's willingness to keep underwriting liquidity. At about HK$0.43 bn of market value, the equity trades at about 0.3x book. That book carries receivables of HK$1.66 bn, with HK$1.29 bn aged over a year, and contingent upside from the Myanmar JV and Tamar Fund.

Our assessment is speculative / high-risk. The risk-reward favours waiting for scheme terms rather than pre-positioning. A creditor-friendly scheme with debt-to-equity conversion could leave limited residual value for minorities despite the asset backing. Conversely, a parent-supported compromise that preserves equity, combined with Myanmar JV and fund realisations, could re-rate the shares meaningfully from distressed levels. Key monitorables are, in order: scheme terms; the CRRC petition outcome; the FY2026 audit opinion; and collections on aged receivables.