WK Group (Holdings) (2535) H1 2024 earnings summary

Executive summary

• H1 revenue rose 28.9% YoY to HK$171.7m, while profit attributable to owners increased 44.2% to HK$13.4m; gross margin eased to 19.0% from 20.3%.

• Larger commercial and infrastructure projects supported growth; backlog was HK$406.6m across 25 projects at 30 June 2024.

Financial highlights

• Revenue was HK$171.7m versus HK$133.2m; cost of services increased 31.0% to HK$139.1m, outpacing revenue growth.

• Gross profit rose 20.7% to HK$32.6m; operating profit was HK$17.2m versus HK$12.3m, and profit attributable to owners was HK$13.4m versus HK$9.3m.

• Basic and diluted EPS was HK0.81 cents versus HK0.62 cents; the weighted-average share count reflected the March share offer and retrospective capitalization issue adjustment.

• Reported profit included HK$4.8m of listing expenses, compared with HK$4.7m in H1 2023.

Outlook and guidance

• Cautious approach amid an unstable real estate market; strict project budgeting, risk-return assessment and contract screening aim to avoid onerous or loss-making contracts.

• Priorities include longer-term supplier partnerships, tighter receivables collection and cash-flow control, and monitoring market trends to adjust strategy.