Pharmesis International (BFK) H1 2024 earnings summary

Executive summary

• H1 2024 revenue fell 13.8% YoY to RMB 23.874m; gross profit declined 29.0% to RMB 8.697m, and net loss widened to RMB 4.014m.

• Weaker demand for Er Ding and Shuling Hou, alongside higher ATT raw-material costs, pressured sales and margins.

• Management described the year-ahead outlook as challenging, citing continued ATT cost pressure, competition and pricing pressure.

Financial highlights

• Revenue was RMB 23.874m, down 13.8% YoY; cost of sales declined 1.8% to RMB 15.177m.

• Gross profit was RMB 8.697m, down 29.0%; gross margin fell to 36.4% from 44.2% YoY, mainly due to lower ATT margins.

• Operating loss widened to RMB 2.569m from RMB 0.260m; loss before tax was RMB 2.920m versus RMB 0.727m.

• Net loss was RMB 4.014m versus RMB 0.727m; attributable loss was RMB 3.482m versus RMB 1.042m.

• Basic and diluted loss per share increased to RMB 12.4 cents from RMB 4.1 cents.

Outlook and guidance

• ATT raw-material costs are expected to continue rising in 2H 2024; ATT selling prices will be adjusted to market demand and production costs.

• ATT margins are expected to continue affecting performance over the next 12 months; management plans cautious operations, sales improvement and cost control.

• Short-term payment obligations are to be met through better sales, cash-flow management and exploration of options including equity fundraising.