Adicon Holdings (9860) H2 2024 earnings summary

Executive summary

• FY2024 revenue fell 11.6% YoY to RMB2,914.1m, primarily due to lower COVID-19 testing; base-business revenue excluding COVID-19 grew 8.2%.

• Profit for the year was RMB62.6m, down 76.1% YoY, as gross margin contracted and COVID-19-related impairment losses increased.

• Growth in esoteric testing and co-construction, alongside investment in digital capabilities and efficiency measures, supported performance amid challenging market conditions.

Financial highlights

• Revenue was RMB2,914.1m versus RMB3,297.8m in 2023; gross profit was RMB1,098.6m versus RMB1,434.1m.

• Profit for the year was RMB62.6m versus RMB262.3m; profit attributable to parent owners was RMB47.0m versus RMB234.9m.

• Basic and diluted EPS were both RMB0.07, compared with RMB0.34 and RMB0.31, respectively, in 2023.

• Adjusted for the COVID-19 testing decline, base-business revenue rose 8.2% YoY; reported overall ASP declined ~6.1% YoY.

• Cost of sales fell 2.6% to RMB1,815.5m; selling and marketing expenses declined 4.0% to RMB465.7m, and administrative expenses declined 6.5% to RMB253.3m.

Outlook and guidance

• The five-year plan targets steady routine-testing growth and faster esoteric-testing expansion, with focus on hematology, oncology, neuroimmunology, chronic disease, early screening and accurate diagnosis.

• Full deployment of the next-generation LIMS across the network is expected by end-2025; it was operating in 20 key subsidiaries in 2024.

• Strategic M&A is planned to add advanced diagnostic capabilities and strengthen esoteric testing; no committed material investment or definitive material fundraising plans were stated as of the announcement date.

• Operating priorities include regional laboratory collaboration, digital transformation, AI adoption, supply-chain integration and continued investment in core businesses.