Executive Summary
REPT BATTERO Energy reported materially higher revenue in QQ2 2024, with revenue of HKD 8.2319 billion, up 69.7% year-over-year and 6.5% quarter-over-quarter. The company posted positive EBITDA of HKD 241.1 million, but ongoing losses at the operating and net levels persisted, with operating income of HKD -732.5 million and net income of HKD -480.0 million. Gross margin stood at 3.59%, reflecting materials and scale-up costs tied to capacity expansion and ramping production. Despite the profitability headwinds, the company generated strong operating cash flow of HKD 2.276 billion and delivered free cash flow of HKD 487.2 million, underpinning a solid liquidity position (cash and equivalents of HKD 11.251 billion) and a net cash balance (net debt negative HKD 0.607 billion). The balance sheet remains resilient with total assets of HKD 41.566 billion and total stockholders’ equity of HKD 11.758 billion. Leverage metrics show moderate debt (long-term debt HKD 7.036 billion) and a debt-to-capitalization ratio of ~0.475, suggesting the company has room to fund capacity expansion and R&D going forward. The QQ2 2024 results reflect a transition: strong top-line growth underpinned by ongoing capex and R&D investment, but profitability remains challenged as the business scales. Investors should monitor margin recovery potential, working capital dynamics, capex cadence, and raw material cost trajectories as the company seeks to translate revenue momentum into sustained earnings power.
Key Performance Indicators
QoQ: 946.12% | YoY:272.99%
Key Insights
Revenue: HKD 8,231,927,310; YoY +69.7%, QoQ +6.5%
Gross Profit: HKD 295,142,291; Gross Margin 3.59%
EBITDA: HKD 241,072,714; EBITDA Margin ~2.93%
Operating Income: HKD -732,458,197; Operating Margin -8.90%
Net Income: HKD -480,016,104; Net Margin -5.83%
EPS: -0.21; Diluted EPS: -0.21
Cash Flow: Operating Cash Flow HKD 2,275,908,063; Free Cash Flow HKD 487,225,450
Balance Sheet: Total Assets HKD 41,566,119,942; Cash & Equivalents HKD 11,250,705,109; Total Liabilities HKD 27,723,992,000; Total...
Financial Highlights
Revenue: HKD 8,231,927,310; YoY +69.7%, QoQ +6.5%
Gross Profit: HKD 295,142,291; Gross Margin 3.59%
EBITDA: HKD 241,072,714; EBITDA Margin ~2.93%
Operating Income: HKD -732,458,197; Operating Margin -8.90%
Net Income: HKD -480,016,104; Net Margin -5.83%
EPS: -0.21; Diluted EPS: -0.21
Cash Flow: Operating Cash Flow HKD 2,275,908,063; Free Cash Flow HKD 487,225,450
Balance Sheet: Total Assets HKD 41,566,119,942; Cash & Equivalents HKD 11,250,705,109; Total Liabilities HKD 27,723,992,000; Total Equity HKD 11,758,506,043
Liquidity/Leverage: Current Ratio 1.148; Quick Ratio 0.961; Cash Ratio 0.562; Debt-to-Equity 0.905; Long-Term Debt to Capitalization 0.374; Total Debt to Capitalization 0.475
Operating Cash Flow Yield: 0.276 on revenue; Free Cash Flow to Equity/Enterprise Value signals; Net Debt position: Net cash HKD ~0.61B
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
8.23B |
69.73% |
6.51% |
| Gross Profit |
295.14M |
272.99% |
946.12% |
| Operating Income |
-732.46M |
6.86% |
35.74% |
| Net Income |
-480.02M |
34.73% |
41.66% |
| EPS |
-0.21 |
34.38% |
41.67% |
Key Financial Ratios
operatingProfitMargin
-8.9%
operatingCashFlowPerShare
$1
freeCashFlowPerShare
$0.21
priceEarningsRatio
-17.34
Management Commentary
Note: No earnings call transcript provided in the data. Transcript-based highlights cannot be generated from missing content.
Implied themes from the QQ2 2024 results (without direct quotes):
- Revenue growth supported by scale-up in Li-ion battery activities and related modules/pack sales, reflected in a 69.7% YoY increase to HKD 8.232B.
- Profitability remains under pressure as the company incurs significant operating costs tied to capex-driven capacity expansion, with operating loss of HKD 732.5M and a negative net income of HKD 480.0M.
- Margins are constrained by higher input costs and ramp-up expenses, evidenced by a gross margin of 3.59% and EBITDA of HKD 241.1M.
- Cash generation remains robust, with operating cash flow of HKD 2.276B and a positive free cash flow of HKD 487.2M, supporting a strong liquidity position despite losses.
- Balance sheet strength is evident in a net cash position and ample cash reserves, which provides financial flexibility to fund ongoing R&D and capacity expansion.
Forward Guidance
Management did not publish explicit forward-looking targets in the QQ2 2024 release. Given industry tailwinds for Li-ion battery supply and the company’s ongoing capex/R&D trajectory, the key scenario is a gradual improvement in gross margins as scale economies mature and product mix shifts toward higher-value cells/modules. Potential outcomes to monitor:
- Gross margin recovery toward mid-single digits or higher as supply chains normalize and volume benefits accrue.
- EBITDA stabilization or expansion if fixed-cost absorption improves with higher utilization and better cost control.
- Working capital management as receivables and inventories normalize post-capex ramp.
- Capex cadence and capacity utilization will be critical: incremental capacity additions can drive revenue growth but require disciplined investment to avoid margin dilution.
- External factors to watch: lithium and raw material price volatility, exchange rate movements, and evolving government subsidies/regulations in China’s EV market.
Investment implications: If margin recovery materializes in 2H24/2025 and the company sustains strong operating cash flow, the stock could transition from a growth-at-any-cost narrative toward a more balanced profile with improving earnings power. Investors should monitor capex intensity, product mix progression, and cadence of revenue growth versus cost containment.