Combine Will International Holdings (N0Z) H1 2024 earnings summary

Executive summary

• H1 revenue rose 30.0% YoY to HK$664.5m, supported by a new-product launch and recovery in existing-product orders.

• Net profit increased 4.1% to HK$21.4m; gross margin improved to 11.3% from 10.9%.

• Strategic priorities include Indonesian manufacturing expansion, product and customer diversification, and investment in automation and sustainable production.

Financial highlights

• Gross profit increased 34.7% to HK$75.0m; operating profit rose 9.6% to HK$40.1m and profit before tax was HK$25.3m, versus HK$22.7m.

• Other income fell 46.9% to HK$10.6m, partly due to lower mould-engineering and investment-product income and the absence of a prior-year Russian-order cancellation fee.

• Selling and distribution expenses rose 72.1% to HK$8.5m; administrative expenses increased 8.6% to HK$37.0m, and finance costs rose 6.9% to HK$14.8m.

• Income tax expense increased 77.3% to HK$3.9m, primarily due to higher assessable profit in the Indonesian subsidiary.

Outlook and guidance

• Phase 2 plush-toy facilities on newly acquired Indonesian land are targeted to commence production in Q1 2025, nearly doubling plush capacity; Indonesian die-casting operations are targeted for H1 2025.

• Growth priorities include supply-chain resilience, diversification, new customer acquisition, and operational excellence; the FY2024 outlook remains optimistic, barring unforeseen circumstances.

• The Heyuan plant solar project, launched in June 2024, is scheduled for completion by year-end; carbon neutrality and manufacturing safety remain priorities.