Voicecomm International (2495) H1 2024 earnings summary

Executive summary

• H1 2024 revenue rose 32.2% YoY to RMB371.2 million and gross profit increased 17.6% to RMB162.4 million; reported net loss was RMB589.8 million.

• Adjusted net profit was RMB43.0 million, down 39.2% YoY, excluding the non-cash RMB632.8 million increase in redeemable capital contributions.

Financial highlights

• Revenue increased RMB90.3 million YoY; enterprise-level solutions revenue rose 34.3% to RMB366.5 million, while other revenue declined 41.6%.

• Gross margin contracted 5.5 percentage points to 43.7%, as early-stage project hardware made up a larger revenue share; cost of revenue rose 46.2% to RMB208.8 million.

• Operating profit declined 28.8% to RMB50.5 million; R&D expense rose 26.9% to RMB64.3 million and selling and marketing expense rose 97.6% to RMB7.8 million.

• Other revenue fell 67.9% to RMB5.7 million, following a prior-period tax refund of ~RMB12.9 million and one-off subsidy of ~RMB4.8 million.

• Trade receivables impairment increased to RMB11.7 million from RMB0.8 million, primarily alongside higher receivable balances.

Outlook and guidance

• Gross margin is expected to recover in H2 2024 as large projects progress from upfront hardware deliveries to software-system delivery.

• H2 priorities include upgrading Voicecomm Brain and Voicecomm Suites, developing vertical solutions, increasing R&D, widening customer channels and pursuing overseas growth, particularly in ASEAN.

• Plans include smart-city and ICV business models such as autonomous-driving operations, smart travel and parking, alongside stronger data security and governance.

• Further investment in metaverse and digital-human technologies is planned, with applications across smart cities, communities, finance, education and cultural tourism.