Venustech Group (002439) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was ¥752.3 million, down 25.65% year-over-year; net loss attributable to shareholders was ¥27.8 million, a decline of 149.20% year-over-year.

• Year-to-date revenue reached ¥2.33 billion, down 8.19% year-over-year; net loss for the period was ¥210.1 million, a decrease of 187.03% year-over-year.

• Cloud security revenue grew over 70% and Xinchuang security revenue rose nearly 30% year-over-year.

• Collaboration with China Mobile drove related transactions up 80.04% year-over-year to ¥746 million in the first three quarters.

• Cash reserves at period-end were ¥4.32 billion, with no interest-bearing debt.

Financial highlights

• Gross margin for the first nine months was ¥1.05 billion, up from ¥966.6 million year-over-year.

• Basic and diluted EPS for Q3 were -¥0.023, down 138.33% year-over-year; for the nine months, EPS was -¥0.17, down 165.38%.

• Net cash flow from operating activities for the nine months was -¥589.7 million, a 2.58% decrease year-over-year.

• Total assets at period-end were ¥13.84 billion, down 6.92% from year-end 2023.

• Shareholders’ equity was ¥11.47 billion, down 4.40% from year-end 2023.

Outlook and guidance

• Despite industry headwinds, management remains confident in long-term cybersecurity market growth, citing regulatory tightening and digital transformation as drivers.

• IDC forecasts China's cybersecurity market to grow at a 10.7% CAGR through 2028, with software and services outpacing hardware.