Wai Chun Bio-Technology (660) H1 2025 earnings summary

Executive summary

• Revenue for the six months ended 31 December 2024 was HK$161.1 million, down 15.4% year-over-year due to decreased market demand.

• Gross profit increased to HK$21.1 million with a margin of 13.1%, up from 8.8% in the prior year period.

• Loss attributable to owners widened to HK$13.7 million from HK$6.7 million year-over-year, mainly due to impairment losses, higher depreciation, and increased finance costs.

• The Group continues to focus on manufacturing and sale of modified starch and other biochemical products, with ongoing efforts to identify acquisition opportunities in the PRC.

Financial highlights

• Administrative expenses rose 28.8% to HK$12.1 million, primarily from increased depreciation.

• Selling expenses decreased 27.7% to HK$5.4 million.

• Net current liabilities increased to HK$144.5 million as of 31 December 2024.

• Cash and cash equivalents stood at HK$1.8 million at period end.

• Net debt to total assets ratio rose to 80.5% from 63.8% at 30 June 2024.

Outlook and guidance

• The group plans to pursue strategic acquisitions to capture new business opportunities in the PRC and strengthen revenue and profit fundamentals.

• Measures to improve working capital and cash flows include cost control and seeking additional funding from investors.