Time Interconnect Technology (1729) H1 2025 earnings summary

Executive summary

• Revenue surged 82.1% year-over-year to HK$4,853.7 million, driven by strong server and data centre demand amid the AI boom.

• Net profit rose 47.1% to HK$313.7 million, with adjusted profit at HK$314.4 million, up 46.5% year-over-year.

• Gross profit increased 30.4% to HK$642.8 million, but gross margin declined to 13.2% from 18.5% due to higher revenue from lower-margin server business.

• Interim dividend of HK1.6 cents per share declared, totaling HK$31.3 million.

Financial highlights

• Operating profit rose 32.1% to HK$412.7 million; operating margin fell to 8.5% from 11.7%.

• EBITDA increased 43.7% to HK$513.9 million; adjusted EBITDA margin dropped to 10.6% from 13.5%.

• Basic EPS was HK16.1 cents, up 47.7% year-over-year; adjusted basic EPS was HK16.1 cents.

• Shareholders’ funds grew 21.1% to HK$1,942.7 million.

• Gearing ratio increased to 42.5% from 35.7% due to higher working capital loans.

Outlook and guidance

• Management remains confident despite macroeconomic and geopolitical challenges, citing strong support from Luxshare Group and ongoing AI-driven demand.

• AI and cloud technology expected to continue driving server and data centre growth.

• Ongoing expansion into medical engineering and global markets, including recent investments and acquisitions.

• Focus remains on expanding server/data centre business, medical equipment cables, and leveraging recent acquisitions for global growth.

• Risks include tariff escalations, supply chain disruptions, and global economic uncertainty.