NetaGo Technology Company Limited (1483.HK) delivered Q4 2024 results with revenue of HKD 94.65 million and a modest gross profit of HKD 1.96 million, resulting in a gross margin of 2.07%. Despite a small YoY revenue decline of 0.75%, profitability remained under pressure as EBITDA came in at HKD -48.2 million and net income registered HKD -9.08 million, yielding a net margin of -9.59% and an EPS of -0.0245 HKD. The quarter showcased improvement in gross profit versus the prior-year Q4 (where gross profit was negative) but was offset by high operating expenses, driving negative operating and pre-tax results.
On the balance sheet, NetaGo exhibits a robust liquidity profile with cash and cash equivalents of HKD 210.5 million and total cash/short-term investments of HKD 342.9 million, contributing to a net debt position of HKD -66.3 million (net cash). Total assets stood at HKD 977.5 million against liabilities of HKD 629.1 million and equity of HKD 317.8 million, with accumulated other comprehensive income (loss) of HKD -318.97 million, indicating substantial negative reserves embedded in equity. The company holds a sizeable intangible asset base of HKD 356.7 million, suggesting potential value tied to non-physical assets but also potential impairment exposure if cash generation remains weak.
Relative to HK peers in the waste management/industrials space, NetaGo’s quarterly margin metrics are significantly weaker. The gross margin of 2.07% lags peers that exhibit margins well above 10% in many cases, and EBITDA/operating margins remain negative, underscoring a profitability challenge even as liquidity remains comfortable. The stock’s valuation metrics show price-to-sales around 4.69x and price-to-book around 1.40x, with an enterprise value multiple that appears negative, reflecting the cash-heavy balance sheet and negative operating profitability. Investors should weigh the near-term earnings dynamics against the longer-term potential of a liquidity buffer and any strategic cost optimization opportunities.