Smart-Core Holdings (2166) H2 2024 earnings summary

Executive summary

• FY2024 revenue fell 18.0% YoY to HK$4,647.9m and gross profit declined 29.4% to HK$311.7m; net profit attributable to owners rose 41.1% to HK$100.3m.

• Strategic mix shifted toward AI-related memory, optical communication and edge-AI businesses, while traditional consumer electronics and mixed distribution contracted.

Financial highlights

• Revenue was HK$4,647.9m vs HK$5,665.9m in 2023; the HK$1,018.0m decline mainly reflected Quiksol Group deconsolidation and ~HK$777.5m lower mixed-distribution sales.

• Gross profit was HK$311.7m vs HK$441.5m; gross margin fell to 6.7% from 7.8%, partly due to the loss of higher-margin mixed-distribution sales after Quiksol deconsolidation.

• Profit for the year rose 9.3% to HK$101.1m; lower administrative and selling expenses and finance costs supported earnings. Owner-attributable net profit rose 41.1% to HK$100.3m.

• Basic and diluted EPS were HK21.41 cents and HK21.39 cents, respectively, versus HK15.08 cents and HK15.05 cents in 2023.

Outlook and guidance

• Overall 2025 outlook is positive, driven by AI infrastructure and applications, overseas expansion, domestic consumption measures and growth in AI-related storage, computing and optical-module chips.

• Smart Vision, Memory Products, Communication Products and Optical Communication expect growth; Communication Products plans to expand cellular IoT module SoC chip sales.

• Smart Displays is cautious on 2025 growth; Optoelectronic Displays plans to pursue gaming monitors and smart displays, while Mixed Distribution expects results to bottom out as its business model is optimized.