Modern Dental Group (3600) H1 2024 earnings summary

Executive summary

• Revenue for the six months ended 30 June 2024 increased by 6.3% year-over-year to HK$1,701.8 million, driven by higher sales volume, market share gains, and digital solutions, especially in Europe and Australia.

• Net profit rose 1.9% year-over-year to HK$214.4 million, with adjusted EBITDA up 5.1% to HK$388.6 million, reflecting solid operational execution despite macroeconomic challenges.

• Interim dividend declared at HK8.0 cents per share, up from HK6.0 cents last year.

• The Group continues to benefit from industry digitalisation, expanded production capacity in Vietnam and Dongguan, and a diversified product portfolio.

Financial highlights

• Gross profit margin was 53.7%, slightly down from 54.2% a year ago, mainly due to currency depreciation and volume-based procurement in China.

• Adjusted EBITDA margin was 22.8%, slightly lower than 23.1% a year ago.

• Basic earnings per share were HK22.59 cents, up from HK22.13 cents.

• Cash and cash equivalents stood at HK$692.0 million as of 30 June 2024.

• Capital expenditure reached HK$98.1 million, mainly for facility expansion and equipment upgrades.

Outlook and guidance

• The group expects continued consolidation in the dental prosthetics market and aims to reinforce its global leadership through strategic acquisitions, partnerships, and expansion of clear aligner products.

• The Group is optimistic about medium- and long-term demand, driven by demographic trends and digitalisation.

• Investments in new production facilities in Dongguan and Vietnam are expected to enhance production capacity and R&D.

• Plans to leverage new production facilities and digital solutions to capture further market opportunities.