Folangsi (2499) H2 2024 earnings summary

Executive summary

• FY2024 revenue rose 17.4% YoY to RMB1,610.9m and profit for the year increased 226.9% to RMB102.0m.

• Expansion included 85 service outlets across 48 Chinese cities, management of over 56,000 equipment units, and full-scale production at the remanufacturing factory.

• Strategic priorities include service-network expansion, broader offerings, internationalization, and a 2025 shift toward managing third-party equipment assets.

Financial highlights

• Revenue increased 17.4% YoY to RMB1,610.9m; cost of sales rose 20.2% to RMB1,147.1m.

• Gross profit grew 11.1% to RMB463.7m, while gross margin declined to 28.8% from 30.4%, reflecting a higher sales mix of equipment.

• Profit before tax was RMB105.4m versus RMB30.6m; profit for the year reached RMB102.0m versus RMB31.2m.

• Other income and gains included a RMB27.4m bargain-purchase gain from the Nichiyu (Shanghai) acquisition; other expenses fell to RMB1.1m from RMB45.2m, including prior-year one-off listing expenses.

Outlook and guidance

• In 2025, the “Platform + Service” model is planned to extend to third-party equipment owners, supporting a lighter-asset operating model and broader service scope.

• Management plans to pursue steady growth, strengthen internal controls, enhance service, and improve organizational capabilities amid complex economic conditions.

• Hong Kong is intended as a base for international expansion; the overseas offer is evolving from component trading toward “Component + Machinery + Services” packages.