TK GROUP (2283) H1 2025 earnings summary

Executive summary

• Revenue for the first half of 2025 rose 4.3% year-over-year to HK$1,050.3 million, driven by strong growth in the mold fabrication segment, despite a decline in plastic components manufacturing revenue.

• Gross profit increased by 6.1% to HK$265.4 million, with gross margin up 0.5 percentage point to 25.3%.

• Net profit attributable to owners rose 8.8% to HK$86.8 million, and basic EPS increased 9.4% to HK10.5 cents.

• Interim dividend of HK4.3 cents per share declared, totaling HK$35.8 million, up from HK4.0 cents last year.

Financial highlights

• Mold fabrication revenue surged 30.4% year-over-year to HK$350.6 million, accounting for 33.4% of total revenue; gross margin slightly decreased to 32.9%.

• Plastic components manufacturing revenue fell 5.2% to HK$699.7 million, representing 66.6% of total revenue; gross margin dipped to 21.4%.

• Operating profit was HK$91.0 million, down 10.9% due to non-recurring items; core operating profit (excluding non-recurring items) rose 8.8% to HK$95.6 million.

• Net cash remained high at HK$1,067.2 million, up 0.6% year-over-year.

• Effective tax rate dropped to 14.4% from 28.4% year-over-year, mainly due to lower withholding tax.

Outlook and guidance

• Management remains cautiously optimistic for the second half of 2025, expecting stable sales trends as tariff agreements clarify and China maintains policy support.

• China’s GDP growth forecast is stable at 4.5%, with additional state subsidies expected to boost domestic demand.

• Strategic partnership with TactoTek for IMSE® technology positions the group for growth in automotive and electronics sectors.