Hong Kong Technology Venture Company (1137) H2 2024 earnings summary

Executive summary

• Group GMV on order intake rose 2.0% to HK$8.59bn in 2024, outperforming the retail market, with Wet Market Express and Everuts showing strong growth, but core Hong Kong ecommerce GMV declined slightly by 0.4%.

• Adjusted EBITDA for Hong Kong ecommerce improved to HK$329.2mn (4.0% margin), while Group adjusted EBITDA was HK$121.0mn, slightly down from 2023.

• The Group reported a net loss of HK$66.7mn, mainly due to start-up losses in new ventures and a HK$42.1mn impairment for the UK automated retail project.

• Strong liquidity with net cash position of HK$712.5mn, despite a HK$220.4mn share repurchase.

• Special dividend of HK$0.38 per share recommended for HKTVmall's 10th anniversary, subject to AGM approval.

Financial highlights

• Turnover increased 0.7% year-over-year to HK$3,839.5mn; gross profit and income from concessionaries rose 3.7% to HK$1,900.9mn.

• Direct merchandise sales fell 3.5% to HK$2,309.0mn; concessionaire sales and other service income rose to HK$1,374.1mn.

• Gross profit margin improved to 25.4% (from 23.6%), driven by pricing strategy and cost management.

• Adjusted EBITDA for Hong Kong ecommerce was HK$329.2mn, up from HK$256.4mn; adjusted EBITDA loss for new ventures and technology widened to HK$186.5mn.

• Cash and cash equivalents increased 63.9% to HK$541.7mn; net assets fell 12.8% to HK$1,871.6mn.

Outlook and guidance

• 2025 GMV on order intake targeted at HK$7.8–8.0bn, with adjusted EBITDA of HK$290–310mn (3.7–3.9% margin) and blended gross margin of 23.5–24.5%.

• Multimedia advertising income expected at HK$140–150mn; fulfilment costs to remain 12.5–13.0% of GMV.

• New ventures (Wet Market Express, Everuts, Life Science) to continue incurring investment phase losses, with aggregate adjusted EBITDA loss of HK$200–215mn projected.

• Strategic focus on cost control, cautious expansion, and recalibration of UK automated retail project.

• 2025 and 2026 expected to be more challenging with high uncertainty and increased competition from Mainland ecommerce operators.