Royale Home Holdings reported Q4 2024 revenue of HKD 144.95 million, delivering a quarterly top line in the mid-HKD hundreds of millions but with a continued negative earnings trajectory and constrained liquidity. Revenue declined 14.3% year-over-year and 3.9% quarter-over-quarter, while gross margin remained thin at 6.49%, generating a gross profit of HKD 9.41 million. The company posted a EBITDA loss of HKD 71.08 million and a net loss of HKD 99.36 million in the quarter, with operating income at HKD -74.22 million and a negative net margin of approximately -68.5%. The negative cash flow profile persisted, as cash from operations was HKD -21.62 million and free cash flow was HKD -21.80 million for the quarter.
From a balance sheet perspective, Royale Home carried total assets of HKD 5.35 billion against total liabilities of HKD 3.81 billion and shareholders’ equity of HKD 1.38 billion. Liquidity remains tight: current ratio 0.76, quick ratio 0.66, and a cash ratio near 0.008. Short-term debt totaled HKD 2.31 billion and long-term debt HKD 0.81 billion, leaving net debt of HKD 3.09 billion. The debt-to-equity ratio sits around 2.26 with a debt-to-capitalization metric of 69.3%, underscoring a high-leverage profile.
Comparative assessment against peers shows Royale Home operates with significantly lower gross margins and a more fragile liquidity position than several listed peers in the furniture and furnishings space, many of which carry stronger gross margins or better working capital dynamics. Absent explicit forward guidance from management, the investment case hinges on potential deleveraging, efficiency improvements, and working-capital optimization, along with any strategic monetization of non-core assets. Investors should monitor debt reduction progress, inventory levels, and any signs of margin expansion as catalysts for a turnaround.