HC Group Inc (2280.HK) Q4 2024 Earnings Report

HC Group Inc posted a challenging QQ4 2024, with reported revenue of CNY 2.53 billion driven by a substantial year-over-year decline of 46.96%. The quarter yielded a gross profit of CNY 106.7 million and a gross margin of 4.21%, but the company still reported an operating loss of CNY 26.7 million and a net loss of CNY 113.0 million. Despite negative headline earnings, there were signs of margin stabilization on a YoY basis, as gross profit rose by ~53% YoY while revenue fell sharply, suggesting cost structure adjustments or mix effects could be improving efficiency at the margin. The company carries a meaningful liquidity buffer (cash and short-term investments of ~CNY 1.07 billion) against a current liabilities base of ~CNY 1.19 billion, resulting in a current ratio of 1.30 and a cash-to-liabilities posture that could support near-term strategic initiatives. However, the balance sheet shows persistent accumulated deficits, with negative retained earnings and a negative net income trajectory, highlighting ongoing profitability and sustainability risks. The stock trades with a negative earnings multiple and a very low price-to-book/price-to-sales backdrop, implying substantial downside risk without clear near-term margin expansion or revenue stabilization. The management commentary (where available) and the four-quarter trajectory point to a company in transition, with potential upside if cost levers and higher-margin offerings gain traction.