Adicon Holdings (9860) H1 2024 earnings summary

Executive summary

• H1 2024 revenue fell 10.9% YoY to RMB1,465.7m as lower COVID-19 testing demand outweighed base-service growth; profit for the period declined 14.0% to RMB103.5m.

• Base-business revenue excluding COVID-19 grew over 10% YoY, led by esoteric testing and collaboration laboratories.

Financial highlights

• Revenue was RMB1,465.7m vs RMB1,644.1m; gross profit was RMB559.7m vs RMB717.0m.

• Profit attributable to owners was RMB101.6m vs RMB111.8m; basic EPS was RMB0.14 vs RMB0.17, while diluted EPS was RMB0.14 in both periods.

• Selling and marketing expenses fell 13.6% to RMB202.0m, administrative expenses fell 21.3% to RMB107.5m, and R&D expenses fell 15.0% to RMB58.7m.

• Net cash used in operating activities was RMB162.8m vs net cash generated of RMB4.9m; cash and cash equivalents were RMB768.0m at period-end.

Outlook and guidance

• Management described 2024 as an industry adjustment and transition year, citing optimism about healthcare initiatives supporting diagnostic innovation and central laboratories/CROs.

• Priorities include efficiency gains, digital upgrades and expanded AI applications in cellular imaging and sequencing data.

• No concrete committed plans for material investments or capital assets in 2024 as of the report date.