Zhongguancun ScienceTech (1601.HK) Q3 2024 Earnings Report

Zhongguancun ScienceTech Leasing reported a robust Q3 2024 operating performance highlighted by a near-perfect gross margin and a strong operating margin. Revenue reached 347.51 million CNY, with gross profit also reported at 347.51 million CNY and an operating income of 285.97 million CNY, demonstrating meaningful operating leverage in the core leasing business. However, results were heavily impacted by a sizeable negative other income/expenses line of -183.39 million CNY, resulting in pre-tax income of 102.58 million CNY and net income of 76.96 million CNY (EPS of 0.0577 CNY).

Balance sheet and cash-flow signals point to a liquidity-rich, capital-light profile. Cash and cash equivalents stood at 811.04 million CNY, total current assets were 811.04 million CNY, and total assets aggregated to 11.705 billion CNY. The company carries long-term debt of 2.361 billion CNY and total debt of 2.361 billion CNY, with net debt estimated at 1.550 billion CNY. Operating cash flow was 208.95 million CNY, while free cash flow totaled 202.43 million CNY. The firm also paid dividends of approximately 297.30 million CNY during the period, underscoring an active capital return policy alongside a sizable non-current asset base (notably 10.829 billion CNY in other non-current assets).

Looking ahead, management did not issue explicit forward guidance in the available materials. The durable profitability metrics (operating margin ~82.3%, net margin ~22.1%) suggest the core leasing operations are delivering sustainable earnings power, but the large negative other income/expenses line implies potential volatility from non-operating items or one-off adjustments. The company appears well-positioned on a relative valuation basis (P/B ~0.343x; P/E ~2.81x) versus some peers, though the balance sheet composition and one-off risk warrant closer scrutiny by investors.