VSTECS (856) H1 2024 earnings summary

Executive summary

• FY2023 revenue reached HK$73.9 billion, with net profit of HK$922 million, EPS of HK$0.6562, and ROE of 11.7%.

• Revenue for the six months ended 30 June 2024 rose to HK$40.08 billion, up 17.8% year-over-year, but net profit declined 9.7% to HK$453.3 million; gross margin fell to 4.43%.

• Maintained strong market positions in cloud computing, consumer electronics, and enterprise systems, with business spanning Asia and Southeast Asia.

• Maintained steady growth in revenue and net profit over 22 years, with average annual growth rates of 24% and 29% since listing.

• No significant events occurred after 30 June 2024 up to the report date.

Financial highlights

• Net debt to total assets ratio was 0.14 at end-2023 and 0.17 as of 30 June 2024; current ratio stable at 1.24 times.

• Cash and bank balances at 30 June 2024 were HK$3.69 billion; total borrowings rose to HK$9.55 billion.

• Inventory days: 59; receivable days: 72; payable days: 78; working capital days: 53.

• Gross profit margin improved to 4.7% in 2023, but declined to 4.43% in 1H 2024.

• Dividend per share for 2023 was HK$0.257; no interim dividend declared for 1H 2024.

Outlook and guidance

• Expects double-digit growth in 2024, with 10% revenue and profit growth in the first two months.

• Management aims to expand market share and product/service offerings, leveraging a broad portfolio and network.

• Focus remains on all business segments for future development, with conservative growth targets due to macroeconomic uncertainty.