Wai Chun Bio-Technology (660) H2 2024 earnings summary

Executive summary

• Revenue declined 52.2% year-over-year to HK$370.1 million due to weakened market demand and cessation of low-performing product lines.

• Gross profit margin improved to 9.2% from 6.5% despite lower gross profit, reflecting product mix optimization.

• Net loss widened to HK$65.7 million from HK$10.1 million, mainly due to a non-recurring impairment loss of HK$58.1 million on non-current assets.

• The Group faces material uncertainty regarding its ability to continue as a going concern, with net current liabilities of HK$139.4 million and net liabilities of HK$55.2 million as of 30 June 2024.

Financial highlights

• Revenue: HK$370.1 million (down from HK$773.7 million year-over-year).

• Gross profit: HK$34.2 million (down from HK$50.4 million); gross margin: 9.2% (up from 6.5%).

• Net loss: HK$65.7 million (vs. HK$10.1 million loss prior year).

• Loss attributable to owners: HK$44.2 million (vs. HK$15.4 million prior year).

• Basic and diluted loss per share: HK cents -25.8 (vs. -9.1 prior year).

• Cash and cash equivalents: HK$2.2 million (vs. HK$6.3 million prior year).

Outlook and guidance

• Plans to pursue strategic acquisitions in the PRC to strengthen revenue and profit fundamentals.

• Measures underway to improve working capital, secure funding, and control costs.