Edensoft Holdings Limited (1147.HK) Q1 2025 Earnings Report

Revenue: 227,855,500 CNY; YoY -9.51%; QoQ -27.55%
Gross Profit: 26,973,000 CNY; YoY -12.76%; QoQ +6.91%
Gross Margin: 11.84%
Operating Income: 5,233,500 CNY; YoY +23.11%; QoQ +245.90%
EBITDA: 5,355,500 CNY; Margin (EBITDA) ~2.35%
Net Income: 5,459,500 CNY; YoY +40.76%; QoQ +4,035.98%
Net Income Margin: 2.40%
EPS (diluted): 0.0027 CNY; YoY +42.11%; QoQ +2,600.00%
EPS (basic): 0.0027 CNY; same as diluted in QQ1 2025
Weighted Avg Shares (out): 2,045,522,667; Diluted: 2,044,947,350
EPS growth reflects profitability leverage against a lower topline.

Balance Sheet & Cash Flow:
- Cash and cash equivalents: 71,304,000 CNY; Net debt: -68,967,000 CNY (net cash position)
- Total assets: 341,065,000 CNY; Total liabilities: 133,485,000 CNY; Total equity: 207,580,000 CNY
- Current assets: 318,965,000 CNY; Current liabilities: 133,116,000 CNY; Current ratio ~2.39x; Quick ratio ~1.93x
- CFO: 15,131,000 CNY; Free cash flow: 15,102,000 CNY
- Working capital change: 38,376,000 CNY (receivables +6,044,000; inventory +29,279,000; other working capital +3,053,000); non-cash items include -29,375,000 CNY
- Capex: -29,000 CNY; Net cash from investing activities: -82,000 CNY; Net cash from financing activities: -21,402,500 CNY; cash impact from forex: -278,000 CNY

Q1 2025 vs. peers and industry benchmarks: Edensoft’s QQ1 2025 gross margin of 11.84% sits mid-range among Chinese IT services peers shown in the dataset (e.g., 1134.HK ~9.01% gross margin, 1084.HK ~21.5% in their respective periods, 1145.HK negative gross margin). Net income margin at 2.40% is modest but healthier than peers with negative profitability in the same period (for example, 1145.HK shows negative gross and net margins in Q1). The company’s net cash position and robust current ratio provide balance sheet resilience relative to peers with higher leverage or weaker liquidity in similar segments.

No QQ1 2025 earnings call transcript was provided in the data set. As a result, there are no management quotes or theme quotes to extract for the transcript highlights. If a transcript becomes available, we will categorize insights by themes such as strategy, operations, market conditions, and execution milestones, and attach direct quotes with context.

Overall, Edensoft displays a constructive near-term risk-reward profile. The QQ1 2025 results show profitability resilience and meaningful free cash flow generation despite a softer top line, underpinned by a strong balance sheet and low leverage. The company’s ability to translate investment in cloud platforms and IT services into sustainable revenue growth remains the key driver of upside. Should cloud services contribute an accelerated mix shift and the company maintain disciplined cost control, the margin trajectory could improve further and support enhanced per-share earnings. Investors should monitor cloud revenue growth, working capital dynamics, and any signs of operating leverage materializing in subsequent quarters. Given the current data, the stance is cautiously constructive with a preference for observing revenue stabilization and early signs of cloud-canvas expansion before adjusting valuation expectations.