MEGAIN Holding Cayman Co Ltd reported Q4 2024 revenue of 41.96 million CNY, down 49.74% YoY from 83.49 million CNY in Q4 2023. Gross profit was 13.47 million CNY, delivering a gross margin of 32.09%, but the quarter showed an operating loss of 0.87 million CNY and EBITDA of -0.51 million CNY, underscoring ongoing operating-cost pressures relative to current revenue. Notably, other income contributed 6.06 million CNY, resulting in income before tax of 5.19 million CNY and a net income of 4.63 million CNY, with a net margin of 11.03%. The substantial non-operating income allows the company to post a positive bottom line despite a near-term easing in core operating earnings.
On the balance sheet, MEGAIN displays a robust liquidity position and negligible leverage. Total cash and cash equivalents plus short-term investments stood at 229.19 million CNY, with net debt of -161.73 million CNY (net cash). The company holds 330.96 million CNY in current assets against 38.61 million CNY in current liabilities, yielding a current ratio of 8.57 and a quick ratio of 7.70, signaling strong short-term liquidity. However, the working-capital-driven metrics show a days sales outstanding (DSO) of 145 days and a CCC of 251.53 days, suggesting relatively elongated receivable cycles and inventory turnover pressures in a low-to-moderate growth environment.
The QQ4 performance, framed by a steep YoY revenue decline, implies a cyclical or market-share-driven softness in MEGAIN’s cartridge-chip and related hardware segments. While profitability on a reported basis is improving only via non-operating income, the balance sheet strength provides optionality to support product development, selective investments, or strategic partnerships. Investors should monitor cost discipline, product mix evolution, and any forthcoming management guidance to assess the durability of the current earnings profile and potential upside from non-operating income sustainability.
Key Performance Indicators
Revenue
41.96M
QoQ: 0.00% | YoY:-49.74%
Gross Profit
13.47M
32.09% margin
QoQ: 0.00% | YoY:-56.11%
Operating Income
-866.50K
QoQ: 0.00% | YoY:-113.93%
Net Income
4.63M
QoQ: 0.00% | YoY:-42.86%
EPS
0.01
QoQ: 0.00% | YoY:-42.86%
Revenue Trend
Margin Analysis
Key Insights
Revenue (Q4 2024): 41.96 million CNY
YoY change: -49.74%
QoQ change: 0.00%
Gross profitability:
Gross profit: 13.4655 million CNY
Gross margin: 32.09%
Financial Highlights
Revenue overview:
- Revenue (Q4 2024): 41.96 million CNY
- YoY change: -49.74%
- QoQ change: 0.00%
Gross profitability:
- Gross profit: 13.4655 million CNY
- Gross margin: 32.09%
- YoY gross profit change: -56.11%
Operating profitability:
- EBITDA: -0.5088 million CNY
- Operating income: -0.8665 million CNY
- EBITDARatio: -0.0121
- Operating income margin: -2.07%
Pre-tax and net income:
- Income before tax: 5.1885 million CNY (margin 12.37%)
- Income tax expense: 0.56 million CNY
- Net income: 4.6285 million CNY (net margin 11.03%)
- EPS: 0.0089 CNY; Diluted: 0.0089 CNY
Profitability and efficiency:
- Net income margin: 11.03%
- Gross margin: 32.09%
- Return on assets: 1.13%
- Return on equity: 1.25%
- Asset turnover: 0.102x; Fixed asset turnover: 6.64x
Balance sheet highlights:
- Total assets: 410.19 million CNY
- Total liabilities: 39.40 million CNY; Total stockholders’ equity: 370.79 million CNY
- Cash & equivalents: 172.35 million CNY; Short-term investments: 56.83 million CNY; Total cash & short-term investments: 229.19 million CNY
- Net debt position: -161.73 million CNY (net cash)
- Current ratio: 8.57x; Quick ratio: 7.70x; Cash ratio: 4.46x
Capital structure and liquidity:
- Short-term debt: 10.483 million CNY; Long-term debt: 0.141 million CNY
- Debt to equity: 2.87%; Debt to capital: 2.79%
- P/BV: 0.60x; P/S: 5.28x; P/E: 11.97x
- Accumulated OCI: 366.46 million CNY (positive OCI balance)
Notes:
- Four-quarter revenue trend and quarterly YoY/QoQ figures are provided in the data set; guidance for 2025 was not disclosed in the provided material.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
41.96M
-49.74%
0.00%
Gross Profit
13.47M
-56.11%
0.00%
Operating Income
-866.50K
-113.93%
0.00%
Net Income
4.63M
-42.86%
0.00%
EPS
0.01
-42.86%
0.00%
Key Financial Ratios
currentRatio
8.57
grossProfitMargin
32.1%
operatingProfitMargin
-2.07%
netProfitMargin
11%
returnOnAssets
1.13%
returnOnEquity
1.25%
debtEquityRatio
0.03
priceToBookRatio
0.6
priceEarningsRatio
11.97
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management transcripts for QQ4 2024 were not provided in the supplied data. As a result, no quotes or theme-based highlights from management commentary can be quoted or analyzed. If a transcript becomes available, we will extract key themes (strategy, operations, market conditions) and relevant quotes with context and implications for investors.
No earnings call transcript data provided for QQ4 2024; unable to extract management quotes at this time.
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N/A
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Forward Guidance
No explicit forward guidance was disclosed in the provided QQ4 2024 data. In the absence of formal targets, the outlook hinges on stabilizing operating profitability, monetizing non-operating income streams, and managing working capital as the company navigates a significant YoY revenue decline. Investors should monitor:
- Any management remarks on roadmap for cartridge chips and related components, including potential new product lines or partnerships.
- Cost-control measures and operating leverage to convert revenue into steady operating profit.
- Working capital dynamics, given the high DSO and CCC, and any improvements in receivables or inventory management.
- Cash deployment strategy given a strong net cash position and lack of near-term debt obligations (opportunity for strategic investments or buybacks if applicable).
- Industry cyclicality in the technology hardware and chip components markets and potential demand recovery signals from customers across geographies.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
6939.HK Focus
32.09%
-2.07%
1.25%
11.97%
6909.HK
1.68%
-0.98%
-1.11%
-4.94%
6913.HK
16.10%
-4.83%
0.19%
30.63%
6601.HK
55.20%
-6.60%
0.40%
47.12%
9600.HK
9.07%
-33.90%
-2.52%
-4.94%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given MEGAIN’s robust liquidity and net cash position, the company possesses a strong balance sheet buffer to weather near-term revenue softness and strategically invest in future growth avenues. However, the QQ4 2024 results reveal a material YoY revenue decline and a continued dependence on non-operating income to achieve net profitability, which raises earnings-quality concerns. The stock appears inexpensive in terms of book value and offers a relatively modest multiple to earnings (P/E ~11.97) despite negative earnings quality from operating activities, but valuation considerations should account for the cash-rich balance sheet and potential upside if MEGAIN can convert non-operating gains into sustainable, recurring operating profits.
Recommendation: Neutral-to-cautious stance pending clearer guidance on 2025 operating strategy, product-mix optimization, and demonstrated progress toward converting revenue into stable operating earnings. Investors should monitor for management's forward-looking commentary on product pipelines, partnerships, and any capital deployment plans that could unlock long-term value. In the near term, the focus will be on improving operating leverage, reducing working-capital intensity, and validating non-operating income sustainability as a path to higher-quality earnings.
Key Investment Factors
Growth Potential
Potential growth exists if MEGAIN scales its cartridge-chip and ancillary product offerings through expanded OEM/aftermarket channels, international distribution, and possible licensing or IP monetization. The substantial OCI balance and net cash position provide financial flexibility to fund R&D, capitalize on strategic partnerships, or pursue selective acquisitions without heavy debt
Profitability Risk
Key risks include a sustained revenue decline in core segments, competitive intensity in the cartridge-chip market, exposure to supply chain and price volatility for components, potential customer concentration risk, and limited visibility into near-term operating leverage given the negative EBITDA. The reliance on non-operating income to post net income also introduces earnings quality concerns absent a clear plan to improve core profitability
Financial Position
Balance sheet shows strong liquidity (net cash of approximately 161.7 million CNY) and minimal liabilities. Total assets of 410.19 million CNY and equity of 370.79 million CNY indicate a solid capital base. The company’s ability to fund ongoing R&D and potential strategic initiatives without incurring debt is a positive overhang, but earnings quality depends on improving operating performance.
SWOT Analysis
Strengths
Strong liquidity with total cash and short-term investments of ~229.19 million CNY
Net cash position (net debt negative) provides financial flexibility
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