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Raytech Holding Reports Financial Results for Six Months Ended September 30, 2024

1. RAY reported a 31.0% revenue increase in H1 2024. 2. Operating expenses rose sharply, decreasing income from operations by 43.7%. 3. Net income fell by 27.5% due to high operating costs. 4. Future focus on enhancing products and customer expansion is emphasized. 5. Significant growth driven by trimmer series sales.

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FAQ

Why Bullish?

Revenue growth shows demand but rising expenses could limit profits. Past trends often see strong revenue boosts reflected positively in stock price, but cost management is crucial.

How important is it?

Financial results indicate both growth potential and risks, essential for investor decisions. Positive revenue growth may attract interest, while management's focus on operational efficiency is crucial.

Why Short Term?

Immediate price impacts likely as the market reacts to interim results. Similar previous earnings reports have influenced immediate trading patterns.

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RAY
January 10, 2025 16:30 ET  | Source: Raytech Holding Limited HONG KONG, Jan. 10, 2025 (GLOBE NEWSWIRE) -- Raytech Holding Limited (the “Company” or “RAY”), a Hong Kong-headquartered company specializing in design, sourcing and wholesale of personal care electrical appliances for international brand owners, today announced its financial results for the six months ended September 30, 2024. CHING Tim Hoi, CEO and Chairman of the Company, commented, “The Company achieved a notable 31.0% increase in revenue for the six months ended September 30, 2024, reaching HKD 43.2 million (US$ 5.6 million), up from HKD 33.0 million in the prior year. This growth was driven primarily by strong sales in our trimmer series within the personal care products segment, reflecting our success in attracting new customers.” “However, operating expenses rose sharply, with merchandise costs increasing by 40.3% to HKD 34.1 million (US$ 4.4 million) and selling, general, and administrative expenses climbing to HKD 5.2 million (US$ 0.7 million). Consequently, income from operations decreased by 43.7% to HKD 3.9 million (US$ 0.5 million), and net income fell by 27.5% to HKD 4.7 million (US$ 0.6 million).” “Looking ahead, we remain committed to optimize our cost structure while continuing to drive sales growth. We are focused on enhancing our product offerings and expanding our customer base to improve profitability and strengthen our market position in the coming periods.” Selected 2024 Interim Financial Metrics      Six Months Ended September 30,    Changes in  (HKD in millions, except per share data, differences due to rounding.)2024     2023     Percentage  Revenue 43.2   33.0  31.0 % Total operating expenses 39.3   26.1  50.9 % Income from operations 3.9   7.0  (43.7)%  Income from operations % 9.1%  21.1%    Total other income, net 1.0   0.6  71.4 % Income before income taxes 4.9   7.6  (34.6)% Net income 4.7   6.4  (27.5)%              Revenue increased by 31.0% to HKD43.2 million for the six months ended September 30, 2024, compared with HKD33.0 million during the same period in 2023.Total operating expenses were HKD39.3 million for the six months ended September 30, 2024, increasing from HKD26.1 million during the same period in 2023.Net income decreased to HKD4.7 million for the six months ended September 30, 2024, from HKD6.4 million during the same period in 2023. Revenue Revenue increased by 31.0% to HKD43.2 million (US$5.6 million) for the six months ended September 30, 2024 from HKD33.0 million for the six months ended September 30, 2023. The increase was principally driven by an increase in sales in our trimmer series within our personal care products, which are mostly driven by engaging new customers. The following table shows segregated revenue by sales of major products and sales of tooling for the six months ended September 30, 2024 and 2023.  (HKD in millions, differences due to rounding.)Six Months Ended September 30, Sales of products2024    2023 Hair styling series 19.1  20.1 Trimmer series 20.9  4.5 Eyelash curler 0.2  0.2 Nail care series 0.9  0.5 Other personal care appliances 1.0  0.7        Sales of tooling 1.1  7.0 Total 43.2  33.0  Operating expenses Merchandise costs increased by 40.3% to HKD34.1 million (US$4.4 million) for the six months ended September 30, 2024 from HKD24.3 million for the six months ended September 30, 2023. The increase was in line with our increase in sales of products. Selling, general and administrative expenses were HKD5.2 million (US$0.7 million) for the six months ended September 30, 2024, as compared to HKD1.8 million for the six months ended September 30, 2023. The increase is mainly due to rise in salaries and additional compensation for the audit committee and rise in transport and travelling expenses as well as in legal and professional fee relating to the Company’s initial public offering (the “IPO”). Income from operations and margin Overall income from operations decreased by 43.7% to HKD3.9 million (US$0.5 million) for the six months ended September 30, 2024 from HKD7.0 million for the six months ended September 30, 2023, primarily due to the increase in IPO relating expenses. Our overall gross profit margin decreased by 5.2% to 21.2% for the six months ended September 30, 2024 from 26.4% for the six months ended September 30, 2023, primarily due to the lower margin profiles of our new customers and less sales of tooling. Net income Net income decreased by 27.5% to HKD4.7 million (US$0.6 million) for the six months ended September 30, 2024 as compared to HKD6.4 million for the six months ended September 30, 2023. The decrease in net income was predominantly due to an increase in selling, general and administrative expenses. About Raytech Holding Limited Raytech Holding Limited is a Hong Kong-headquartered company with over 10 years of experience in the personal care electrical appliance industry. Through its operating subsidiary in Hong Kong, it sources and wholesales a diverse range of personal care electrical appliances ranging from hair styling, tooling, trimmer, eyelash curler, neck care, to nail care and other body and facial care appliances for international brand owners, providing integrated product design, production processing, and manufacturing solutions. For more information please visit: https://ir.raytech.com.hk/. Forward-Looking Statement This press release contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These forward-looking statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions, and other factors discussed in the “Risk Factors” section of the Company's annual report on Form 20-F filed with the SEC on July 30, 2024 and the Interim Report on Form 6-K for the six months ended September 30, 2024, filed with the U.S. Securities and Exchange Commission (the “SEC”). For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. For more information, please contact: Investor RelationsWFS Investor Relations Inc.Janice Wang, Managing PartnerEmail: services@wealthfsllc.comPhone: +86 13811768599+1 628 283 9214 RAYTECH HOLDING LIMITEDUNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS   As of March 31,  (Unaudited)As ofSeptember 30,   2024  2024  2024   HKD  HKD  US$ ASSETS         CURRENT ASSETS         Cash and cash equivalents  35,885,666   81,047,102   10,431,712 Accounts receivable, net  14,557,523   13,476,241   1,734,550 Amount due from a director  145,166   –   – Merchandise inventories, net  1,855,686   1,135,068   146,096 Taxes receivables  395,005   104,085   13,397 Prepayments  5,000   5,000   644 TOTAL CURRENT ASSETS  52,844,046   95,767,496   12,326,399              NON-CURRENT ASSETS            Property and equipment, net  –   –   – Deferred initial public offering costs  5,252,768   –   – Long-term deposits  16,200   16,200   2,085 TOTAL NON-CURRENT ASSETS  5,268,968   16,200   2,085 TOTAL ASSETS  58,113,014   95,783,696   12,328,484              LIABILITIES AND SHAREHOLDERS’ EQUITY            CURRENT LIABILITIES            Accounts payable  732,340   1,098,929   141,445 Accounts payable - related party  24,278,340   20,418,181   2,628,059 Accruals  1,018,618   920,901   118,531 Contract liabilities  1,008,415   -   - TOTAL CURRENT LIABILITIES  27,037,713   22,438,011   2,888,035              TOTAL LIABILITIES  27,037,713   22,438,011   2,888,035 COMMITMENTS AND CONTINGENCIES                         SHAREHOLDERS’ EQUITY            Ordinary Shares, US$0.00000625 par value, 8,000,000,000 Ordinary Shares authorized, 16,000,000 shares and 17,613,083 shares issued and outstanding as of March 31, 2024 and September 30, 2024, respectively(1)  783   862   110 Additional paid-in capital  99,217   37,717,487   4,854,683 Retained earnings  30,975,301   35,627,336   4,585,656 TOTAL SHAREHOLDERS’ EQUITY  31,075,301   73,345,685   9,440,449 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  58,113,014   95,783,696   12,328,484   RAYTECH HOLDING LIMITEDUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME   (Unaudited)For the Six Months EndedSeptember 30,   2023  2024  2024   HKD  HKD  US$ REVENUE         Sales of products  26,011,185   42,101,829   5,418,999 Sales of tooling  7,006,014   1,147,077   147,642    33,017,199   43,248,906   5,566,641              OPERATING EXPENSES            Merchandise costs  (24,305,564)  (34,100,724)  (4,389,163)Selling, general and administrative expenses  (1,751,531)  (5,229,459)  (673,093)Total operating expenses  (26,057,095)  (39,330,183)  (5,062,256)             INCOME FROM OPERATIONS  6,960,104   3,918,723   504,385              OTHER INCOME (EXPENSE)            Interest income  615,405   1,431,474   184,248 Interest expense  (1,657)  –   – Loss from foreign currency exchange  (16,334)  (407,242)  (52,417)Total other income, net  597,414   1,024,232   131,831 INCOME BEFORE INCOME TAX PROVISION  7,557,518   4,942,955   636,216 PROVISION FOR INCOME TAXES  (1,139,449)  (290,920)  (37,445)NET INCOME  6,418,069   4,652,035   598,771              WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES            Basic and diluted(1)  16,000,000   17,613,083   17,613,083 EARNINGS PER SHARE            Basic and diluted  0.40   0.26   0.03   RAYTECH HOLDING LIMITEDUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS   (Unaudited)For the Six Months EndedSeptember 30,   2023  2024  2024   HKD  HKD  US$ Cash flows from operating activities         Net income  6,418,069   4,652,035   598,771 Adjustments to reconcile net income to net cash provided by operating activities            Depreciation of property and equipment  2,928   -   - Amortization of right-of-use asset  51,286   -   - Loss from unrealized foreign currency translation  17,918   406,530   52,325 Changes in operating assets and liabilities            Accounts receivable, net  (654,485)  978,597   125,957 Merchandise inventories, net  (681,683)  720,618   92,752 Prepayments  54,000   -   - Accounts payable  (150,807)  372,876   47,994 Accounts payable - related party  12,178,316   (3,694,385)  (475,511)Accruals  (203,832)  (97,717)  (12,577)Contract liabilities  (1,705,854)  (1,008,415)  (129,795)Operating lease obligation  (52,344)  -   - Taxes receivables  -   290,920   37,445 Taxes payables  1,139,449   -   - Net cash provided by operating activities  16,412,961   2,621,059   337,361 Cash flows from investing activities            Repayment of amount due from a director  210,702   145,166   18,684 Net cash provided by investing activities  210,702   145,166   18,684 Cash flows from financing activities            Proceed from Initial Public Offering of shares  -   42,772,241   5,505,289 Deferred initial public offering cost  (257,702)  -   - Net cash (used in)/from financing activities  (257,702)  42,772,241   5,505,289 Change in cash  16,365,961   45,538,466   5,861,334 Effect of foreign exchange on cash  35,039   (377,030)  (48,528)Cash at the beginning of the period  21,362,580   35,885,666   4,618,906 Cash at the end of the period  37,763,580   81,047,102   10,431,712              Supplementary cash flow information            Cash paid for income tax  –   –   – Cash paid for interest expense  –   –   – 

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