Legend Strategy International Holdings Group Company Limited (1355.HK) reported QQ2 2025 results reflecting a meaningful year-over-year revenue uplift but continued near-term profitability challenges. Revenue rose to HKD 25.45 million, up 135.8% YoY, as the company advances its China accommodation strategy. However, EBITDA remained negative at HKD -3.41 million and net income declined to HKD -13.48 million, producing an EPS of -0.0166. The significant gap between top-line growth and profitability suggests a high fixed-cost base, possible underutilized capacity, and elevated interest charges in a capital-intensive travel lodging model.
Liquidity remained constrained, with a current ratio of 0.60 and a cash ratio of 0.149, signaling limited near-term liquidity buffers. The company benefited from favorable working capital dynamics (negative cash conversion cycle of approximately -1.67 days) driven by very quick receivables turnover and short payables cycle, yet this does not offset the ongoing cash burn from operations and financing costs. Management commentary is not provided in the available transcript data, limiting direct quotes to anchor the narrative. The lack of peer comparables in the reported data further complicates benchmarking in a highly fragmented travel lodging landscape in Hong Kong/PRC markets.
Looking ahead, the revenue trajectory may continue to improve as occupancy and rate realization in China recover from earlier cycles, but sustained profitability will depend on ongoing cost discipline, optimization of fixed costs, and access to favorable financing terms to support capital structure transitions. Investors should weigh the favorable revenue momentum against the current cash burn, leverage indicators, and the need for capital efficiency to achieve a balanced risk-adjusted return.