Xuan Wu Cloud Technology (2392.HK) Q4 2024 Earnings Report

QQ4 2024 Revenue Contraction with Marginal Profitability Trends - Xuan Wu Cloud Technology reported CNY 251.9 million in revenue for QQ4 2024, down 65.7% year-over-year (YoY) from the prior-year quarter. The steep revenue decline reflects a challenging top-line environment in the China CRM SaaS arena, potential project timing effects, or customer mix shifts. Despite the top-line drop, gross profit was CNY 54.264 million, generating a gross margin of 21.54%, and the quarter produced positive EBIT and net income in the reported data, suggesting some operating leverage or one-off items amid the revenue drop. - EBITDA was CNY 4.332 million with an EBITDA margin of ~1.72% and operating income of CNY 3.489 million (operating margin ~1.39%). Note: The dataset contains an inconsistency between pre-tax income (CNY 2.496 million) and tax expense (CNY 4.031 million) versus the reported net income (CNY 6.679 million). If taken purely from pre-tax and tax lines, net income would be negative; the apparent discrepancy warrants verification against the HKEX filings. Investors should treat the reported net income figure with caution until reconciled. - Cash flow remained negative on an operating basis, with net cash from operating activities of (CNY) -2.354 million and free cash flow of (CNY) -2.368 million, underscoring ongoing working capital intensity and the need for operating cash flow improvement to underpin growth investments. The company carried a cash balance of roughly CNY 71.4 million and total debt of about CNY 159.3 million, yielding a net debt position of approximately CNY 87.9 million. - The equity base stood at roughly CNY 331.6 million against total assets of CNY 633.8 million, implying a balanced capital structure with a debt ratio of 0.251 and a debt-to-equity ratio of ~0.480. Valuation metrics show P/E around 18.3x and P/B around 1.47x, suggesting a modestly discounted, micro-cap software exposure relative to larger tech peers in China. - The quarter’s results point to a company that remains in transition: revenue softness amid a positive near-term profitability signal, ongoing working capital pressure, and a cash position that affords capital allocation options while management contends with margin discipline and potential operating improvements. A key differentiator for investors will be the company’s ability to convert revenue stability into sustained operating cash flow and to progress toward a more robust ARR/retention profile in a competitive Chinese CRM SaaS market.