Essex Bio-Technology (1061) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 was HK$811.6 million, down 9.8% year-over-year due to regulatory headwinds in the PRC medical industry.

• Net profit decreased by 7.3% to HK$157.4 million compared to the same period last year.

• The Group’s core business remains in ophthalmology and surgical biologics, with flagship biologics accounting for 86.4% of turnover.

• Major R&D investments continue in ophthalmology, including late-stage clinical development of SkQ1 for dry eye disease and anti-VEGF products for wet-AMD.

• The Group declared an interim dividend of HK$0.06 per share, up from HK$0.045 last year.

Financial highlights

• Turnover: HK$811.6 million (down 9.8% year-over-year).

• Gross profit: HK$724.6 million (down from HK$810.5 million year-over-year); gross margin 89.3% (down from 90.1%).

• Net profit: HK$157.4 million (down from HK$169.8 million year-over-year); net margin 19.4% (up from 18.9%).

• R&D expenditure: HK$53.5 million (6.6% of turnover), with HK$41.1 million capitalised.

• Cash and cash equivalents: HK$598.4 million as at 30 June 2024.

Outlook and guidance

• The Group expects regulatory headwinds in the PRC to ease as policies become more familiar.

• Focus remains on expanding the ophthalmology and surgical portfolios, with new product launches and clinical trials underway.

• Construction of a second factory is targeted for completion in 2025, supporting future growth.