Kidsland International (2122.HK) Q4 2024 Earnings Report

Kidsland International reported QQ4 2024 revenue of 240.42 million CNY, a 16.2% year-over-year decline, with gross profit of 58.97 million CNY and a gross margin of 24.53%. The quarter remained unprofitable at the operating level (EBITDA -43.17 million CNY; operating income -57.16 million CNY) and net income declined to -60.998 million CNY, yielding an EPS of -0.0762. Despite a narrow operating cash flow of 6.28 million CNY for the quarter and modest free cash flow of 0.834 million CNY, the company continues to grapple with structural profitability and balance-sheet stress, including negative equity of -89.79 million CNY and total debt of 335.52 million CNY, resulting in a leveraged balance sheet and liquidity pressure (current ratio 0.962).

The four-quarter view shows sales softness in 2024 relative to the prior year while margins compressed by fixed cost absorption and product mix. Though year-on-year metrics show some improvement in profitability (operating income and EPS are relatively stable in the context of continued losses), the company’s balance-sheet position and cash flow profile imply a high sensitivity to working-capital dynamics and macro consumer demand.

Looking forward, management commentary (not provided in the prompt) and industry dynamics would need to emphasize margin stabilization, working-capital optimization, and a credible deleveraging plan to drive investor confidence. In the near term, the risk/reward appears skewed to the downside given the negative equity base and the dependency on discretionary consumer spending in Macau, Hong Kong, and Mainland China.