Tak Lee Machinery (2102.HK) Q4 2024 Earnings Report

Tak Lee Machinery Holdings Limited reported QQ4 2024 revenue of HKD146.752 million, up 4.5% year over year, driven by steady demand for heavy equipment sales and leasing activities in Hong Kong. The company delivered positive EBITDA of HKD20.289 million and a modest operating income of HKD2.296 million, but net income declined to a loss of HKD1.424 million in the quarter, primarily due to tax and minor non-operating adjustments. Cash flow remains robust, with net cash provided by operating activities of HKD52.662 million and free cash flow of HKD49.478 million, culminating in a strong liquidity position (cash balance of HKD73.765 million and net cash position of HKD68.001 million). The balance sheet shows manageable leverage and ample liquidity, underpinned by a high current ratio (12.64x) and a solid equity base (total stockholders’ equity of HKD443.727 million).

Looking at the four-quarter run rate, revenue grew modestly YoY (4.53%), while gross profit rose ~7.0% YoY, and EBITDA remained positive. However, the net income for QQ4 2024 was negative, reflecting a tax expense that outweighed pre-tax income in the period and a low earnings base. The business remains cash-generative with strong operating cash conversion and a conservative balance sheet with persistent net cash. The market remains cyclical for agricultural machinery and the sustainability of earnings will hinge on maintenance/parts revenue, utilization of leased assets, and the company’s ability to optimize tax and non-operating costs. Investors should monitor demand cycles in Hong Kong and potential expansion opportunities, as well as any changes in regulatory or tax environments that could impact profitability.