Exchange: HKSE | Sector: Technology | Industry: Information Technology Services
Q2 2025
Published: Jun 30, 2025
Earnings Highlights
Revenue of $30.40M up 42.7% year-over-year
EPS of $-0.06 increased by 70.6% from previous year
Gross margin of 15.7%
Net income of -45.73M
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Platt Nera International Limited (1949.HK) QQ2 2025 Results Analysis – IT Services in THB: Revenue Growth Yet Persistent Losses and Working-Capital Strains
Executive Summary
Platt Nera International Limited reported QQ2 2025 revenue of THB 30.399 million, up 42.7% year over year, underscoring modest top-line momentum in its IT services portfolio. However, the quarter remains unprofitable on an operating basis, with EBITDA of THB -45.327 million and pre-tax and net income of THB -45.732 million. The negative profitability is driven by a heavy SG&A and operating expense base (G&A THB 50.388 million and SG&A combined THB 51.981 million), which dwarfs gross profit of THB 4.763 million and a relatively slim gross margin of 15.67%. The company posted a net loss and negative earnings per share (EPS -0.0618 THB), despite YoY improvements in some metrics. Management commentary is not included in the provided transcript dataset, limiting direct quotes for attribution.
Near-term liquidity and capital structure show mixed signals. The current ratio sits at 1.23 with a modest quick ratio of 1.06 and a cash ratio of 0.148, indicating adequate but thin liquidity. Working capital efficiency appears challenging, as indicated by a days sales outstanding (DSO) of approximately 735 days and a cash conversion cycle (CCC) of about -57.5 days, suggesting long receivable collection relative to payable timing. Cash flow metrics show positive operating cash flow per share (0.0258 THB) and free cash flow per share (0.0246 THB), but these translate into a fragile profitability profile given the ongoing losses. Valuation projects a negative earnings multiple (P/E ~ -1.11x) and a price-to-book of 0.62x, with an EV/EBIT of negative magnitude, reflecting the current earnings erosion and capital structure.
The investment outlook remains contingent on two hinges: (1) meaningful improvement in operating profitability through tighter cost controls and potentially higher-margin revenue, and (2) better working capital management to convert receivables into cash more efficiently. In the absence of formal management guidance in the transcript dataset, investors should monitor any forthcoming disclosures on cost optimization initiatives, product/service mix adjustments, and potential strategic partnerships in the Thai IT services market.
Key Performance Indicators
Revenue
30.40M
QoQ: 0.00% | YoY:42.67%
Gross Profit
4.76M
15.67% margin
QoQ: 0.00% | YoY:27.42%
Operating Income
-47.22M
QoQ: 0.00% | YoY:-249.57%
Net Income
-45.73M
QoQ: 0.00% | YoY:68.16%
EPS
-0.06
QoQ: 0.00% | YoY:70.57%
Revenue Trend
Margin Analysis
Key Insights
Revenue: THB 30.399 million for QQ2 2025, up 42.67% YoY (YoY growth metric provided).
Revenue and profitability:
- Revenue: THB 30.399 million for QQ2 2025, up 42.67% YoY (YoY growth metric provided).
- Gross Profit: THB 4.763 million, gross margin 15.668%.
- Operating Expenses: THB 51.982 million (G&A THB 50.388 million; Selling/SG&A THB 1.593 million).
- EBITDA: THB -45.327 million, EBITDA margin -149.11% of revenue.
- Operating Income: THB -47.218 million, operating margin -155.33%.
- Net Income: THB -45.732 million, net margin -150.44%.
- EPS (diluted): THB -0.0618; Weighted average shares: 740 million.
Liquidity and balance sheet:
- Current ratio: 1.233x; Quick ratio: 1.061x; Cash ratio: 0.148x.
- Working capital efficiency: DSO 734.89 days; DIO 326.58 days; DPO 1,118.98 days; Cash Conversion Cycle (CCC) -57.51 days.
- Turnover metrics: Receivables turnover 0.122x; Payables turnover 0.0804x; Inventory turnover 0.276x; Fixed asset turnover 2.35x; Asset turnover 0.0295x.
- Leverage and capitalization: Debt ratio 0.254; Debt to equity 0.809; Long-term debt to capitalization 0.328; Total debt to capitalization 0.447; Enterprise value multiple -8.47 (negative due to losses).
- Cash flow per share metrics: Operating cash flow per share THB 0.0258; Free cash flow per share THB 0.0246; Cash per share THB 0.109.
Valuation and efficiency:
- Price to earnings: -1.105x (negative due to loss).
- Price to book: 0.623x; Price to sales: 6.65x.
- Revenue yield and efficiency indicators reflect a distressed profitability profile with limited equity cushion given negative earnings.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
30.40M
42.67%
0.00%
Gross Profit
4.76M
27.42%
0.00%
Operating Income
-47.22M
-249.57%
0.00%
Net Income
-45.73M
68.16%
0.00%
EPS
-0.06
70.57%
0.00%
Key Financial Ratios
currentRatio
1.23
grossProfitMargin
15.7%
operatingProfitMargin
-155.3%
netProfitMargin
-150.4%
returnOnAssets
-4.44%
returnOnEquity
-14.1%
debtEquityRatio
0.81
operatingCashFlowPerShare
$0.03
freeCashFlowPerShare
$0.02
priceToBookRatio
0.62
priceEarningsRatio
-1.11
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Earnings Transcript: No transcript data available for QQ2 2025 in the provided dataset. Consequently, there are no management quotes to quote or themes to annotate. Investors should await or refer to the official HKEX release and any subsequent conference calls for direct color on cost-optimization plans, client mix evolution, and strategic initiatives.
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Forward Guidance
Management-specific forward guidance is not included in the provided QQ2 2025 transcript data. Based on the quantitative results, the near-term path to a sustainable profitability profile hinges on two levers: (1) reducing the SG&A and operating expense base to restore EBITDA profitability, and (2) driving revenue growth with higher-margin IT services for core verticals (banking/financial services, government, utilities, telecommunications) in Thailand and nearby markets.
Key considerations for investors:
- Watch for any announced cost-reduction programs, headcount rationalization, or outsourcing measures to pare SG&A as a percentage of revenue.
- Monitor the trajectory of gross margin expansion through better project mix, pricing discipline, or higher-value offerings within the integrated IT solutions portfolio.
- Track receivables collection performance and working capital management to reduce the extremely high DSO and improve CCC.
- Assess any guidance on order intake, backlog, and deployment of capital toward scalable platforms (cloud, cyber security, managed services) that could improve revenue visibility and margin profiles.
- Consider macro tailwinds in Thailand’s BFSI/government IT modernization agenda and how Platt Nera positions to win new contracts versus regional competitors.
Overall, the execution risk remains high given the current profitability and working-capital indicators. A material improvement in EBITDA margin toward breakeven or positive territory would be a critical signal for a more constructive investment thesis.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
1949.HK Focus
15.67%
-1.55%
-14.10%
-1.11%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given QQ2 2025 results, the intermediate-term investment thesis hinges on a meaningful path to profitability and improved working capital efficiency. The stock trades at a negative P/E and a modest P/B, reflecting the market’s concern about ongoing losses. If management announces and executes concrete cost-reduction measures and secures higher-margin, recurring IT services deals (particularly in government and BFSI sectors), and if receivables collection improves to bring DSO down toward industry norms, the company could begin to compound value. Conversely, failure to compress SG&A and stabilize cash flows would keep the investment at a high-risk, high-uncertainty level with limited near-term upside.
Key Investment Factors
Growth Potential
Moderate topline potential from IT services growth in Thailand's financial services and government digitalization initiatives. The YoY revenue growth of 42.7% suggests demand for the company’s integrated IT solutions, but scale remains limited as of QQ2 2025. Growth will depend on winning higher-margin projects, improving project mix, and expanding recurring revenue (e.g., managed services) to stabilize cash flows.
Profitability Risk
Significant profitability risk persists due to a heavy SG&A/operating expense base that eclipses gross profit, leading to a negative EBITDA and net income. Working-capital management (DSO ~735 days) indicates cash flow fragility and potential liquidity constraints. Leverage is elevated (debt ratio 0.254, debt/equity 0.809), and the negative earnings multiple adds valuation risk. Absence of published management guidance increases execution risk until clarity on cost controls and revenue trajectory is provided.
Financial Position
Thin liquidity buffer with current ratio just above 1 and a cash ratio well below 1. Balance sheet shows moderate leverage but weak profitability, implying reliance on continued financing or equity support if losses persist. Cash flow metrics (CFO per share and FCF per share) are positive on a per-share basis but do not offset the cash burn implied by negative EBITDA.
SWOT Analysis
Strengths
Vertical exposure to thriving IT services demand in banking/finance and government verticals via integrated IT solutions.
HK listing may provide liquidity and visibility to institutional investors.
Solid gross profit contribution relative to revenue, indicating some value-add in services despite high operating costs.
Weaknesses
Material profitability erosion: EBITDA and net income are negative in QQ2 2025 despite revenue growth.
High SG&A and operating expense base that dwarfs gross profit, indicating weak operating leverage.
Severe working-capital inefficiencies (DSO ~734 days) and tepid cash conversion.
Limited earnings quality and no disclosed management guidance in the provided transcript dataset.
Opportunities
Digital modernization and cloud-adoption cycles in Thailand's BFSI/government sectors could drive higher-margin, recurring revenue.
Potential for cost optimization (headcount rationalization, process improvements) to restore EBITDA profitability.
Expansion of managed services and post-implementation support could improve cash conversion and client stickiness.
Threats
Sustained losses and cash burn could pressure liquidity and equity valuation.
Currency and macroeconomic volatility in Thailand and the broader region may impact project pricing and client capex cycles.
Competitive pressure in IT services, including regional integrators and global providers, could compress margins if price competitiveness intensifies.
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