ETHK Labs (1931) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 was RMB1,353.5 million, down 1.7% year-over-year, while profit for the period rose 22.7% to RMB127.6 million, driven by higher gross profit margin in after-sales services.

• Adjusted profit (non-GAAP) increased 8.9% to RMB127.8 million, reflecting core operational improvements.

• Gross profit margin improved to 24.0% from 21.9%, mainly due to a decrease in cost of services rendered.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit rose 7.7% to RMB324.7 million, with gross margin up 2.1 percentage points to 24.0%.

• Net profit margin improved to 9.4% from 7.6% year-over-year.

• EBITDA increased 10.4% to RMB211.8 million.

• Earnings per share were RMB9.27 cents, up from RMB7.62 cents.

• Cash and cash equivalents grew 29.8% to RMB1,589.6 million.

Outlook and guidance

• Plans to expand product portfolio, distribution network, and hospital coverage to capture IVD market growth.

• Focus on enhancing solution services, R&D capabilities, and AI integration for product development.

• Intends to utilise proceeds from recent share placement for medical business development and working capital.

• Intends to strengthen relationships with hospitals and suppliers, and invest in sales and R&D personnel.