Wai Chun Bio-Technology (660) H2 2024 earnings summary

Executive summary

• Revenue for the year ended 30 June 2024 was HK$370.1 million, down 52.2% year-over-year due to weakened demand and strategic cessation of low-performing product lines.

• Gross profit margin improved to 9.2% from 6.5% year-over-year, but gross profit declined to HK$34.2 million.

• Loss attributable to owners increased to HK$44.2 million from HK$15.4 million year-over-year, mainly due to a non-recurring impairment loss of HK$58.1 million on non-current assets.

• The Group recorded a total loss for the year of HK$65.7 million, compared to HK$10.1 million in the prior year.

Financial highlights

• Revenue: HK$370.1 million (2023: HK$773.7 million), a 52.2% decrease year-over-year.

• Gross profit: HK$34.2 million (2023: HK$50.4 million); gross profit margin: 9.2% (2023: 6.5%).

• Loss attributable to owners: HK$44.2 million (2023: HK$15.4 million).

• Net loss: HK$65.7 million (2023: HK$10.1 million).

• Basic and diluted loss per share: HK cents (25.8) (2023: HK cents (9.1)).

• Cash and cash equivalents: HK$2.2 million (2023: HK$6.3 million).

• Net current liabilities: HK$139.4 million (2023: HK$29.7 million).

Outlook and guidance

• The Group plans to pursue strategic acquisitions in the PRC to strengthen revenue and profit fundamentals.

• Measures to improve working capital and cash flows include securing loan facilities, negotiating with investors, and cost control.

• Directors believe sufficient cash resources will be available for the next twelve months, but material uncertainty remains regarding going concern.