Hong Kong Technology Venture Company (1137) H1 2024 earnings summary

Executive summary

• Achieved 4.9% year-over-year growth in GMV on order intake to HK$4,235.5 million in 1H2024, outperforming Hong Kong's retail sector, which declined 6.5%.

• Hong Kong Ecommerce business delivered stable growth and positive adjusted EBITDA, offsetting start-up losses from New Ventures and Technology.

• Net loss of HK$27.5 million in 1H2024, reversing a profit of HK$48.7 million in 1H2023, mainly due to increased losses in New Ventures.

• Focused on innovation and digital ecosystem expansion, with new business models (Wet Market Express, Everuts) showing strong growth but incurring start-up losses.

Financial highlights

• Group turnover rose 3.8% year-over-year to HK$1,919.3 million in 1H2024.

• Adjusted EBITDA dropped 54.5% to HK$37.6 million; adjusted free cash flow turned positive at HK$47.3 million.

• Gross profit margin for direct merchandise sales improved to 25.0% (1H2023: 23.5%).

• Net cash and liquidity position of HK$989.9 million as of June 2024.

• Net loss margin was 1.4% for the period.

Outlook and guidance

• 2024 annual GMV on order intake target remains HK$8.7–9.1 billion; adjusted EBITDA margin target 2.6–3.0%.

• Wet Market Express GMV target for FY2024 revised upward to HK$260–320 million, with higher expected adjusted EBITDA loss.

• Everuts target revised downward to HK$55–64 million GMV and HK$32–37 million adjusted EBITDA loss.

• No interim dividend declared to retain liquidity for CAPEX, new ventures, and share repurchase.

• Fully Automated Retail Store and Life Science Projects targets adjusted due to operational delays and accelerated R&D.