Yunkang Group (2325) H2 2024 earnings summary

Executive summary

• FY2024 revenue fell 20.1% YoY to RMB711.9m; net loss widened to RMB793.2m from RMB101.9m, driven by weaker revenue and gross profit, receivables impairment and laboratory asset provisions.

• Operating cash flow remained favorable at RMB258.8m. Strategy shifted toward core customers and products, with alliance services and featured infection products identified as areas of strength.

Financial highlights

• Revenue was RMB711.9m, down 20.1% YoY; gross profit fell 35.2% to RMB211.1m and gross margin declined to 29.6% from 36.5%.

• Operating loss was RMB752.1m versus RMB52.6m; loss before tax was RMB791.2m versus RMB86.8m, and net loss was RMB793.2m versus RMB101.9m.

• Loss attributable to owners was RMB791.7m; basic and diluted loss per share were RMB1.33 versus RMB0.17.

• Net impairment losses on financial assets rose to RMB536.2m from RMB104.6m, mainly from trade receivables; net finance costs increased to RMB39.1m from RMB34.2m.

• Selling expenses rose 19.5% to RMB180.2m; administrative expenses rose 38.2% to RMB264.8m. These included a one-off RMB12.9m technical consulting expense and RMB19.6m asset impairment provisions.

Outlook and guidance

• Strategic focus is on core customers and products, innovation in infection and other featured testing, and further integration of AI into R&D, operations and diagnostic services.

• R&D investment remained focused on product, operating-system and digitalization innovation; R&D expenses were RMB53.0m, or 7.4% of revenue, versus 6.2% in 2023.

• A clinical standardization expert consensus for tNGS testing was expected to be released in China in H1 2025.