- Tsit Wing delivered Q1 2025 revenue of HKD 190.21 million, up 8.87% year-over-year and 2.35% quarter-over-quarter, supported by ongoing demand for its Beverage Solutions and Food Products segments. Gross profit totaled HKD 57.94 million with a gross margin of 30.46%. Operating income was HKD 14.83 million, producing an operating margin of 7.80%, while net income reached HKD 12.43 million for a net margin of 6.54%. Earnings per share stood at HKD 0.0172.
- The year-over-year margin trajectory remains pressured: gross margin declined about 6.95% year over year and net income dropped 31.22% YoY, despite top-line growth. The company’s leverage remains modest (debt ratio circa 3.92%, total debt to capitalization ~5.03%), with strong liquidity (current ratio 2.99, quick ratio 1.74, cash ratio 0.91) and a dividend payout of 62.6% alongside a dividend yield of ~1.93%.
- Operational efficiency and working capital management are areas to monitor. Inventory days (~137) remain elevated, contributing to a cash conversion cycle of ~121 days, while receivables turnover and payables dynamics imply a more extended working-capital cycle. The business generated positive EBITDA (~HKD 20.0m) but negative free cash flow per share (-HKD 0.00247), underscoring ongoing capital expenditure and working capital needs.
- Outlook remains cautious given the absence of formal guidance in the data. Investors should watch commodity input costs, pricing/mix leverage in Beverage Solutions, macropolitical and consumer sentiment factors in Hong Kong and key markets, and ongoing capital discipline while balancing dividend policy with cash generation.