Edensoft Holdings Limited (1147.HK) Q4 2024 Earnings Report

Edensoft Holdings Limited reported QQ4 2024 revenue of 314.49 million CNY, representing a YoY decline of 5.8% with a modest gross profit of 25.23 million CNY and an implied gross margin of 8.02%. Operating income reached 1.51 million CNY (operating margin ~0.48%), while net income was a token 0.132 million CNY, underscoring a tight earnings quality in a capital-light IT services and cloud-adoption environment. The quarter shows a substantial non-cash adjustment component (-74.10 million CNY) contributing to a (-43.33 million CNY) net operating cash outflow and a negative free cash flow of about (-43.34 million CNY). Cash and equivalents stood at 84.24 million CNY with total cash and near-cash holdings around 94.59 million CNY, yielding a net cash position of roughly 42.95 million CNY against gross liabilities of 236.85 million CNY and equity of 200.79 million CNY. The balance sheet remains conservatively funded with limited debt (short-term debt 40.02 million CNY, long-term debt 1.27 million CNY; net debt negative, i.e., net cash). In a sector characterized by price-to-earnings multiples that appear elevated for low-visibility profits, Edensoft’s stock trades with a high P/E (~260x) and modest ROE (~0.07%), highlighting earnings quality and growth under execution risk. Management commentary available in the call transcripts is not provided in the material, limiting qualitative quotes for this report. Investors should monitor working capital dynamics, cloud-services monetization, and efficiency initiatives to determine whether the company can convert its cash cushion into sustained, higher-return growth going forward.