Cheerwin Group Limited (6601.HK) Q4 2024 Earnings Report

Cheerwin Group Limited reported QQ4 2024 revenue of 285.49 million CNY, up 18.3% year over year, with gross profit of 157.67 million CNY and a gross margin of 55.2%. Despite top-line strength, operating income remained negative at -18.86 million CNY (operating margin -6.60%), reflecting elevated selling, general and administrative (SG&A) expenses and R&D investment that are not fully offset by gross profit. The quarter benefited from a sizable contribution from total other income, which lifted income before tax to 11.23 million CNY and net income to 11.96 million CNY for QQ4 2024; earnings per share stood at 0.009 CNY. Importantly, Cheerwin generated solid operating cash flow of 84.53 million CNY and free cash flow of 81.42 million CNY, underscoring meaningful cash generation despite a negative current quarter operating result. Dividends of 78.53 million CNY were paid during the period, contributing to a net cash outflow from financing activities of 83.58 million CNY. The balance sheet shows a fortress liquidity position: cash and short-term investments totaling about 2.87 billion CNY and a net cash position of approximately -841.94 million CNY. Liquidity metrics are strong (current ratio 4.25, quick ratio 3.83, cash ratio 1.14), with total assets of 3.80 billion CNY and total liabilities of 812.47 million CNY. Notably, the enterprise value is reported as negative, reflecting a substantial net cash position. Looking ahead, the company enjoys financial flexibility to pursue growth initiatives or shareholder-friendly actions, but profitability discipline and sustainable margin improvement remain critical to elevating earnings quality beyond non-operating income sources.