WK Group (Holdings) (2535) H2 2023 earnings summary

Executive summary

• Revenue rose 10.1% YoY to HK$370.2 million, while profit attributable to owners fell 35.8% to HK$25.2 million, including HK$16.0 million of listing expenses.

• Backlog increased to HK$550.5 million across 19 projects at year-end; shares began trading on 8 March 2024.

Financial highlights

• Revenue increased HK$33.8 million, or 10.1%, to HK$370.2 million in 2023; higher work performed on new projects supported growth.

• Gross profit rose 6.2% to HK$71.1 million; gross margin eased to 19.2% from 19.9% in 2022.

• Operating profit was HK$34.1 million versus HK$46.8 million; profit attributable to owners was HK$25.2 million versus HK$39.3 million.

• Basic and diluted EPS was HK1.7 cents versus HK2.6 cents; 2023 profit included HK$16.0 million of listing expenses.

• Other income and net gains shifted from HK$2.7 million in 2022 to a HK$0.3 million net loss in 2023, partly reflecting lower government grants and life-insurance valuation losses.

Outlook and guidance

• Strategy targets market-share gains, additional projects, expanded steel production capacity, a larger workforce and prudent financial management.

• Backlog was HK$550.5 million across 19 projects at 31 December 2023, versus HK$253.5 million across 28 projects a year earlier.

• Net IPO proceeds are intended for project upfront costs (HK$56.0 million), a new production facility and land (HK$33.1 million), and manpower (HK$1.9 million); none had been used by the announcement date.