VSTECS (856) H1 2025 earnings summary

Executive summary

• Revenue grew by 13.6% year-over-year to HK$45.5 billion, with profit attributable to equity shareholders up 34.7% to HK$610.5 million.

• Gross profit reached HK$2.16 billion, with gross margin improving to 4.75% from 4.43% year-over-year.

• EPS reached HK44.06 cents and ROE was 13.7%, outperforming the Hang Seng Index average.

• Southeast Asia business surged 22.5%, with notable country growth: Philippines 45.4%, Malaysia 31%, Indonesia 29.9%, Thailand 15%.

• Cloud computing revenue soared 67.9%, driven by strong AI demand and partnerships with major cloud vendors.

Financial highlights

• Operating profit for the period was HK$928.1 million, up from HK$775.4 million year-over-year.

• Cash and bank balances stood at HK$3.82 billion as of 30 June 2025.

• Total borrowings increased to HK$9.53 billion from HK$9.24 billion at year-end 2024.

• Net debt to total assets ratio remained stable at 0.14.

• Inventory days improved to 48, account receivable days at 70, account payable days at 65, and working capital cycle at 53 days.

Outlook and guidance

• Targeting around 20% profit growth and similar revenue growth, with a focus on high operational quality.

• Plans to expand market share and product/service range, leveraging a broad portfolio and network.

• Dividend payout ratio to remain stable at around 35%, with a single year-end payout.

• No interim dividend is recommended for the six months ended 30 June 2025.

• M&A activity will be accelerated as part of growth strategy.