Comba Telecom Systems (2342) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended June 30, 2024, was HK$2,343.5 million, down 27.4% year-over-year due to slower network capital project construction by global telecom operators.

• Gross profit fell 26.7% to HK$623 million, but gross margin improved slightly to 26.6% from 26.3% last year.

• Net loss attributable to shareholders was HK$158.4 million, reversing a profit of HK$112.2 million in the prior year period.

• No interim dividend was declared, compared to HK$1.2 cents per share last year.

• The Group remains focused on R&D, product innovation, and expanding international and new business segments.

Financial highlights

• Net cash position at June 30, 2024, was HK$884 million, down 13.9% from year-end 2023.

• Total assets decreased 12.6% year-over-year to HK$8,730 million; net assets fell 9.7% to HK$3,274 million.

• Operating cash flow for 1H24 was HK$157 million, a 70% decline year-over-year.

• R&D expenses rose 7.4% to HK$229.7 million, representing 9.8% of revenue.

• Other income and gains fell 65.1% to HK$65.2 million, mainly due to lower exchange gains.

Outlook and guidance

• Global 5G base station deployment continues to grow, with 261 operators launching commercial 5G services.

• The Group will focus on product innovation, profitable projects, and expanding new business areas such as 5G+ vertical industry applications.

• Ongoing investment in R&D and green antenna solutions to maintain competitiveness.

• Domestic 5G investment is shifting from broad to deep coverage, with focus on high-value scenarios and industry applications.

• Emphasis on innovation, cost control, and expanding into international and vertical markets.