Heng Hup Holdings Limited (1891.HK) Q4 2024 Earnings Report

Heng Hup Holdings delivered a solid QQ4 2024 with a modest revenue uptick and meaningful profitability and cash flow improvements. Revenue reached MYR 420.7 million, up 8.97% year over year, while gross profit rose to MYR 32.1 million (gross margin 7.63%). The company converted profitability into free cash flow of MYR 17.6 million and generated operating cash flow of MYR 20.7 million, supporting a stronger balance sheet position and modest deleveraging. Net income surged 130% year over year to MYR 7.0 million, underscoring improved operating efficiency and cost discipline (operating margin 2.26%, EBITDA 11.8 million for the quarter). Investment emphasis remains on optimizing sourcing, processing efficiency, and maintaining liquidity to navigate commodity cycle volatility. Despite a favorable YoY trajectory, the quarter shows revenue stability QoQ, and margins remain at relatively modest levels within the context of the metals recycling/ferrous scrap industry. Heng Hup’s balance sheet remains reasonably conservative with total debt MYR 89.5 million and net debt MYR 44.5 million, cash and equivalents plus short-term investments of MYR 51.3 million, and strong working capital management as evidenced by a positive change in working capital of MYR 16.0 million. The company’s valuation metrics indicate a patient, low-teen multiple profile relative to peers, suggesting upside could emerge from continued margin stabilization and potential expansion in processing-based value-added offerings. Looking forward, management commentary (where disclosed) emphasized cash generation and disciplined capital allocation, but formal forward guidance was not provided in the QQ4 2024 release. Investors should monitor cyclical drivers such as steel demand, scrap supply dynamics, and MYR liquidity to assess earnings trajectory and potential upside from further margin expansion.