CLink Squared Limited (1463.HK) Q2 2025 Earnings Report

CLink Squared Limited (1463.HK) reported QQ2 2025 results that showed meaningful top-line growth but a severe profitability deterioration. Revenue reached 27.76 million MYR, up 17.2% year over year, yet EBITDA declined to -81.83 million MYR and net income posted -82.65 million MYR, delivering a net margin of -2.98%. The bulk of the loss was driven by an outsized operating expense base, with General and Administrative expenses totaling 87.02 million MYR and selling, general, and administrative expenses totaling 87.08 million MYR, yielding an operating loss of approximately 82.20 million MYR on 27.76 million MYR in revenue. Gross profit was 4.96 million MYR, producing a gross margin of 17.9%, but gross profit declined on a YoY basis by about 27.2 percentage points. Management commentary is not publicly available in the provided transcript dataset, so the narrative from the QQ2 call could not be quoted or incorporated. The company maintains a strong balance sheet and liquidity position, with cash and cash equivalents of ~54.55 million MYR and net cash of ~50.90 million MYR (net debt of -50.90 million MYR). This liquidity supports near-term operating needs but does not offset the structural profitability challenges reflected in the income statement. The stock trades at a book value premium (P/B ~2.76) and a high price-to-sales ratio (P/S ~12.28), largely reflecting the cash-rich balance sheet rather than earnings power. Looking ahead, the key questions for investors are whether management can meaningfully reduce overhead, scale higher-margin services (including software and enterprise solutions), and drive sustainable revenue growth to convert cash into cash-flow-positive earnings. A material upgrade in profitability hinges on cost containment and/or a successful shift in business mix toward higher-margin offerings. Based on the QQ2 2025 data and the absence of explicit forward guidance or transcript-based quotes, the near-term investment case remains cautious, with a preference for visibility on cost-reduction plans and path to profitability.