MTT Group Holdings (2350) H1 2025 earnings summary

Executive summary

• H1 FY2025 revenue fell 38.8% YoY to HK$220.3m, mainly because prior-year CDN licence sales did not recur; net loss was HK$18.2m versus a HK$1.4m profit.

• Lower distribution sales and higher expected-credit-loss impairment weighed on results, while SI Solutions revenue grew.

Financial highlights

• Cost of sales and services fell 38.2% to HK$198.7m; gross profit declined 44.0% to HK$21.5m and gross margin was 9.8% versus 10.7%.

• Loss before tax was HK$19.3m; basic loss per share was HK2.92 cents versus earnings of HK0.22 cents.

• Net impairment losses under the ECL model rose to HK$6.8m from HK$2.2m, attributed to higher corporate default risk in weak economic conditions.

• Selling and distribution expenses increased 2.4% to HK$17.0m; administrative expenses fell 10.5% to HK$15.3m and finance costs rose 17.6% to HK$2.0m.

• Tax credit was HK$1.0m versus tax expense of HK$0.1m in H1 FY2024.

Outlook and guidance

• Long-term demand opportunities include enterprise digital transformation, cloud adoption, data-centre investment, HCI products, AI servers and outsourced IT support.

• The IT industry outlook was described as positive over the long run despite challenging local macroeconomic and competitive conditions.

• SI Solutions workforce expansion and systems upgrades using listing proceeds were delayed by talent shortages and a longer development phase; remaining proceeds were expected to be used by 31 March 2025.