Executive Summary
Regal Partners delivered a Q3 2024 set of results that underscores a bifurcated earnings narrative. On the top line, revenue declined meaningfully year over year and quarter over quarter, signaling a softer demand environment or weaker mix in the core furnishing portfolio. Revenue for QQ3 2024 was CNY 22.21 million, down from CNY 37.55 million in the prior quarter and from prior-year levels, with gross profit of CNY 3.79 million and a gross margin of roughly 17.1%. The operating expense base was markedly elevated at CNY 66.29 million, driving an EBIT and EBITDA profile that remained deeply negative (EBITDA of -CNY 48.52 million and operating loss of -CNY 44.08 million). The salient offset in net income came from a substantial
Key Performance Indicators
QoQ: -40.85% | YoY:-55.01%
QoQ: -62.54% | YoY:-82.71%
QoQ: -274.31% | YoY:-9.75%
QoQ: 105.04% | YoY:142.59%
QoQ: 105.20% | YoY:145.00%
Key Insights
totalOtherIncomeExpensesNet of CNY 45.92 million, resulting in income before tax of CNY 1.83 million and net income of CNY 2.33 million for QQ3 2024. This large non-operating contribution creates an artificial lift to earnings in the quarter, masking underlying operating weakness. Management commentary (where available) is not provided in the data set, so the sustainability of the other income item remains an open question. On the cash flow front, operating cash flow was negative at CNY -9.19 mi...
Financial Highlights
totalOtherIncomeExpensesNet of CNY 45.92 million, resulting in income before tax of CNY 1.83 million and net income of CNY 2.33 million for QQ3 2024. This large non-operating contribution creates an artificial lift to earnings in the quarter, masking underlying operating weakness. Management commentary (where available) is not provided in the data set, so the sustainability of the other income item remains an open question. On the cash flow front, operating cash flow was negative at CNY -9.19 million, with free cash flow also negative at CNY -9.55 million, highlighting ongoing cash burn from core activities despite a positive quarterly bottom line due to non-operating gains. In sum, the quarter reflects a fragile operating trajectory, a one-off earnings boost, and meaningful cash consumption, all of which bear close watching for sustainability and runway.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
22.21M |
-55.01% |
-40.85% |
| Gross Profit |
3.79M |
-82.71% |
-62.54% |
| Operating Income |
-44.08M |
-9.75% |
-274.31% |
| Net Income |
2.33M |
142.59% |
105.04% |
| EPS |
0.00 |
145.00% |
105.20% |
Key Financial Ratios
operatingProfitMargin
-198.5%
Management Commentary
Transcript data for QQ3 2024 were not provided in the sourcing. Consequently, there are no management quotes or management-call themes to anchor the analysis. If a transcript becomes available, a themed synthesis (strategy, operations, market conditions, guidance) with contextual quotes will be added here.
Forward Guidance
Given the absence of explicit management guidance within the supplied materials, forward-looking assessment relies on the current earnings structure and sector dynamics. Key factors to monitor include: (i) sustainability of the non-operating income that enabled the QQ3 2024 net income print; (ii) trajectory of core operating expenses relative to revenue — with operating costs well in excess of revenue, margin expansion hinges on either revenue recovery or cost rationalization; (iii) demand catalysts in Regal’s target geographies (domestic China and international markets for sofa and furniture products) and potential improvements in mix toward higher-margin offerings; (iv) balance sheet and liquidity resilience, given negative operating cash flow and negative free cash flow in QQ3 2024; and (v) competitive environment and material costs (raw materials, logistics) which can affect gross margins. Management guidance, if disclosed in future releases, should be weighed against these structural considerations. Our stance is cautious: the stock may require clearer evidence of sustained operating profitability and cash-flow improvement before assigning a more constructive near-term stance.