Executive Summary
Kelfred Holdings Limited posted QQ4 2024 revenue of HKD 128.084m, up 29.3% year-over-year, driven by stronger demand for eyewear products and OEM manufacturing activities. However, the quarter delivered a negative operating result of HKD -3.909m and a net loss of HKD -4.691m, underscoring ongoing investments and cost pressures that subdued profitability despite top-line growth. Gross margin stood at 10.49% (HKD 13.439m gross profit on revenue), reflecting a relatively modest profitability profile for a hardware-intensive eyewear producer in a competitive market.
The company generated positive operating cash flow of HKD 7.886m and free cash flow of HKD 5.971m, supported by a cash balance of HKD 27.813m and a net debt position of HKD -15.252m. The balance sheet remains robust with total assets of HKD 282.928m, total liabilities of HKD 126.494m, and total equity of HKD 156.434m. Liquidity metrics are healthy (current ratio 2.04, quick ratio 1.31), while working capital movements (notably higher receivables and inventories) consumed cash during parts of the year. Notably, accumulated other comprehensive income stands sizable at HKD 151.434m, contributing meaningfully to equity and warranting further disclosure in follow-on filings.
In the absence of formal earnings-call transcripts in the provided data, management commentary and forward-looking guidance could not be quoted or analyzed. Based on the quantitative results and prevailing industry dynamics, the investment thesis hinges on the ability to translate revenue growth into sustained profitability, tighter cost control, and capitalization on OEM/multibrand opportunities. Relative to peers, Kelfred demonstrates a stronger liquidity profile, but profitability remains a near-term hurdle that investors should monitor closely.
Key Performance Indicators
QoQ: 0.00% | YoY:-100.93%
QoQ: 0.00% | YoY:-135.67%
QoQ: 0.00% | YoY:-135.00%
Key Insights
Revenue performance: HKD 128,084,499; YoY +29.25%; QoQ 0.00%
Gross Profit: HKD 13,438,499; Gross Margin 10.49%; YoY +13.30%; QoQ 0.00%
Operating Income: HKD -3,909,000; Operating Margin -3.05%; YoY -100.93%; QoQ 0.00%
Net Income: HKD -4,691,000; Net Margin -3.66%; YoY -135.67%; QoQ 0.00%
Earnings Per Share (EPS): HKD -0.0094; YoY -135.00%; QoQ 0.00%
Cash Flow: Operating Cash Flow HKD 7,886,000; Free Cash Flow HKD 5,971,500; Capex HKD -1,914,500
Liquidity & Balance Sheet: Cash and cash equiva...
Financial Highlights
Revenue performance: HKD 128,084,499; YoY +29.25%; QoQ 0.00%
Gross Profit: HKD 13,438,499; Gross Margin 10.49%; YoY +13.30%; QoQ 0.00%
Operating Income: HKD -3,909,000; Operating Margin -3.05%; YoY -100.93%; QoQ 0.00%
Net Income: HKD -4,691,000; Net Margin -3.66%; YoY -135.67%; QoQ 0.00%
Earnings Per Share (EPS): HKD -0.0094; YoY -135.00%; QoQ 0.00%
Cash Flow: Operating Cash Flow HKD 7,886,000; Free Cash Flow HKD 5,971,500; Capex HKD -1,914,500
Liquidity & Balance Sheet: Cash and cash equivalents HKD 27,813,000; Total current assets HKD 239,178,000; Total assets HKD 282,928,000; Total current liabilities HKD 117,309,000; Total liabilities HKD 126,494,000; Total stockholders’ equity HKD 156,434,000; Net debt HKD -15,252,000
Cash Generating Ability & Leverage: Operating cash flow margin and free cash flow generation indicate positive cash conversion despite a net loss; Debt levels are modest (Total debt HKD 12,561,000; Debt-to-equity ~0.08); Current ratio 2.04, quick ratio 1.31
Profitability & Efficiency Metrics: Gross margin 10.49%; Operating margin -3.05%; Net margin -3.66%; Asset turnover ~0.45x; Inventory turnover 1.34x; Receivables turnover 1.10x
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
128.08M |
29.25% |
0.00% |
| Gross Profit |
13.44M |
13.30% |
0.00% |
| Operating Income |
-3.91M |
-100.93% |
0.00% |
| Net Income |
-4.69M |
-135.67% |
0.00% |
| EPS |
-0.01 |
-135.00% |
0.00% |
Key Financial Ratios
operatingProfitMargin
-3.05%
Management Commentary
No earnings-call transcript was provided in the data. Accordingly, transcript-based themes, management strategy quotes, or qualitative guidance could not be extracted. If a transcript becomes available, we will extract themes under strategy, operations, and market conditions with direct quotes and context.
No transcript quotes available in the provided data.
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No transcript quotes available in the provided data.
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Forward Guidance
No formal forward guidance was disclosed in the provided materials. Our qualitative assessment, grounded in the QQ4 2024 results, suggests the following areas to monitor:
- Margin trajectory: Gross margin at ~10.5% remains a focal point. Management commentary about pricing, product mix, and supplier costs will determine whether the company can convert revenue growth into stronger earnings.
- Operating expense discipline: SG&A and R&D (if disclosed) will be key to unlocking profitability as volumes scale.
- Working capital management: With DSO around 82 days, inventory days ~67, and payables ~72 days, improvements in working capital efficiency could meaningfully lift free cash flow.
- Capex and product strategy: Any announced investments in product development, manufacturing optimization, or OEM capacity (including Miga-brand opportunities) could drive longer-term growth but may keep near-term margins depressed.
- Competitive dynamics and macro trends: Eyewear demand, consumer discretionary spend, and competitive pricing pressure will influence the ability to sustain revenue growth and margin expansion.
- Currency and geographic exposure: Given geographic mix and potential FX exposure, translated outcomes could affect margins and cash flows in HKD terms.
Overall, the base-case view is that Kelfred has the liquidity to pursue growth initiatives, but profit recovery is not assured in the near term absent margin improvement and cost containment.