Zhaoke Ophthalmology (6622.HK) Q4 2024 Earnings Report

Zhaoke Ophthalmology Limited reported QQ4 2024 revenue of 9.78 million CNY, up 162.6% year over year, reflecting a material top-line expansion versus the prior-year period driven by pipeline progress and initial commercialization activity in the PRC. However, the quarter remains heavily weighted toward research and development spend, culminating in a substantial net loss of 80.85 million CNY and an EBITDA of -80.71 million CNY. The company posted an operating loss of -113.996 million CNY, underscoring the ongoing burn associated with advancing its ophthalmology pipeline toward later-stage development and potential commercialization. Liquidity remains exceptionally strong, with cash and cash equivalents of 1.121 billion CNY and a net debt position of -882.4 million CNY, supported by a solid current ratio of 5.16 and a quick ratio of 5.11. Nevertheless, key working-capital metrics indicate elevated capital tying up in receivables and inventories (DSO ~141 days; DIO ~253 days; CCC ~394 days), reflecting clinical and manufacturing timing nuances typical of biotech players at this stage. The stock trades at a high price-to-sales multiple relative to Chinese biotechnology peers, suggesting a premium valuation tied to the anticipated success of its pipeline rather than current profitability. Looking ahead, the lack of explicit forward guidance in QQ4 2024 highlights the dependency of near-term profitability on pipeline milestones, regulatory approvals, and eventual revenue ramp. Investors should monitor (1) pipeline progression across anterior/posterior segment indications (e.g., dry eye, AMD, DME, glaucoma), (2) potential partnerships or licensing deals to monetize assets, and (3) any steps toward commercial scale that could meaningfully improve operating leverage. The investment risk remains skewed toward execution risk and timing of potential product approvals, balanced by a robust balance sheet and substantial liquidity runway.