Essex Bio-Technology (1061) H2 2024 earnings summary

Executive summary

• Turnover decreased by 3.9% year-over-year to HK$1,669.8 million, mainly due to regulatory headwinds in the PRC pharmaceutical sector.

• Net profit rose 11.6% year-over-year to HK$307.2 million, driven by cost control and resilient flagship biologics performance.

• Ophthalmology and surgical segments remain core, with flagship bFGF-based biologics accounting for 84.5% of total turnover.

• Significant R&D investments in SkQ1 (dry eye disease) and anti-VEGF (wet-AMD) products, with both assets representing over 24% of total assets.

• Final dividend of HK$0.06 per share proposed, up 33.3% year-over-year.

Financial highlights

• Gross profit margin stable at 89.8% (2023: 89.9%); net profit margin improved to 18.4% (2023: 15.8%).

• Basic EPS increased to HK54.14 cents (2023: HK48.27 cents); diluted EPS at HK53.18 cents.

• Cash and cash equivalents rose 9.3% to HK$557.2 million.

• Current ratio improved to 1.81 (2023: 1.54); gearing ratio reduced to 0.29 (2023: 0.32).

• R&D expenditure (including capitalised) was HK$156.6 million, 9.4% of turnover.

Outlook and guidance

• Management expects regulatory headwinds to ease as policies become familiar, with continued focus on innovation and R&D.

• Expansion of product portfolio and market reach in PRC and Southeast Asia remains a priority.

• Ongoing construction of a second factory in Zhuhai, with completion targeted for 2026 or 2027.