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HONG KONG - Fenbo Holdings Limited (NASDAQ:FEBO), a manufacturer for the Remington brand, announced its financial results for the first half of fiscal year 2024, revealing a revenue increase alongside a net loss. The unaudited report showed revenues of HK$66.9 million, up 14.2% from the previous year, but a net loss of HK$1.9 million compared to a net income last year.
The company's gross profit rose to HK$14.9 million, or 22.3% of revenues, from HK$10.5 million, or 17.9% of revenues, for the same period in 2023. The loss per share for the six months ended June 30, 2024, was HK$0.17, a downturn from an income per share of HK$0.02 for the same period last year.
Despite the revenue growth, Fenbo Holdings faced a significant decrease in cash and cash equivalents, which dropped 44.1% to HK$25.9 million from HK$46.3 million as of December 31, 2023. The company attributed the net loss to increased administrative expenses, which rose to HK$16.1 million from HK$8.7 million in the previous year.
Chairman Mr. Siu Lun Allan Li commented on the financial performance, acknowledging the revenue and gross profit increases but noting the insufficient coverage for rising administrative costs. He mentioned actions taken to reduce costs and improve efficiency, expressing confidence in the company's long-term strategy and its ability to generate sustainable returns for stakeholders.
The company's cost of sales increased in line with revenue, reaching HK$51.9 million, while selling and marketing expenses also rose to HK$1.1 million due to higher shipping volumes. General and administrative expenses saw a significant jump due to increased staff costs and post-listing administrative support.
Fenbo Holdings, with a history dating back to 1993, transitioned from toy manufacturing to producing personal care electrical appliances. The company's manufacturing subsidiary in Guangdong, PRC, has the capacity to produce over three million units per year.
The financial statement is based on a press release from Fenbo Holdings Limited.
In other recent news, Fenbo Holdings Limited, a Hong Kong-based firm, announced a strategic investment of $150,000 into a U.S.-based artificial intelligence (AI) fund. Managed by a Delaware investment firm, the fund aims to secure up to $20 million to invest in early and growth-stage tech companies, especially those in financial technology, blockchain/web3, and enterprise technology sectors. Fenbo's investment is part of a broader strategy to tap into AI expertise that can potentially enhance the development of its products.
Fenbo's CEO, Mr. Allan Li, stated that the fund's focus aligns with the company's vision for the future of enterprise software. The investment will provide Fenbo access to a portfolio of innovative startups and industry experts, who may assist in identifying and evaluating AI solutions to improve their products and customer experiences.
The company believes that AI represents a significant investment opportunity, with potential impacts surpassing that of the internet at its inception. The managing firm of the fund has been actively assembling a new fund this year to invest in leading private companies in the AI industry, such as OpenAI. These are recent developments based on a press release statement from Fenbo Holdings.
InvestingPro Insights
Fenbo Holdings Limited's recent financial results reflect a company in transition, with both promising developments and challenges. According to InvestingPro data, the company's market capitalization stands at $56.42 million USD, indicating its current market valuation.
InvestingPro Tips highlight that Fenbo "holds more cash than debt on its balance sheet" and "liquid assets exceed short term obligations." These factors suggest a relatively strong financial position, which could provide a buffer as the company navigates its current challenges and implements cost-reduction strategies.
However, the company's stock performance has been volatile. InvestingPro Tips indicate that the "stock has taken a big hit over the last week" and has "fared poorly over the last month." This aligns with the reported net loss and increased administrative expenses in the recent financial results.
The company's gross profit margin of 18.56% for the last twelve months, as reported by InvestingPro, closely mirrors the 22.3% reported in the recent half-year results. This suggests that while there has been some improvement, Fenbo continues to "suffer from weak gross profit margins," as noted in the InvestingPro Tips.
It's worth noting that InvestingPro offers 12 additional tips for Fenbo Holdings, providing a more comprehensive analysis for investors interested in diving deeper into the company's financial health and market position.
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