LK Technology (558) H1 24/25 earnings summary

Executive summary

• Revenue for the six months ended 30 September 2024 was HK$2,594.4 million, down 5.8% year-over-year.

• Net profit was HK$165.9 million, a 19.1% decrease, while profit attributable to equity holders was HK$148.4 million, down 27.7% year-over-year.

• Gross profit margin improved to 28.7% (up 2.5 percentage points), but operating and net profit margins declined to 8.3% and 6.4%, respectively.

• Interim dividend declared at HK3 cents per share, down from HK4.5 cents last year.

• The company showed resilience amid global headwinds, with strong growth in plastic injection moulding and CNC machining offsetting a decline in die-casting machine revenue.

Financial highlights

• Operating profit was HK$216.5 million, down 20.6% year-over-year.

• Basic and diluted EPS were HK10.9 cents, a 26.8% decrease from the previous year.

• Cash and cash equivalents fell 26.5% to HK$1,746.7 million, while total borrowings decreased 4.7% to HK$1,709.0 million, with 86.8% as short-term loans.

• Net assets increased slightly to HK$4,049.1 million.

• Interim dividend of HK3 cents per share to be paid in January 2025.

Outlook and guidance

• Management expects easing inflation and supportive policies to revive investment and consumption in the second half of the year.

• The company will deepen its global 2.0 strategy, expanding production and sales networks in the US, Japan, Mexico, Europe, and Southeast Asia.

• Focus remains on technological innovation, especially in lightweight automotive materials and integrated die-casting for new energy vehicles.