Raytech Holding Reports Financial Results for Fiscal Year Ended March 31, 2024

Rhea-AI Summary

Raytech Holding (RAY) reported strong financial results for the fiscal year ended March 31, 2024. The company's revenue increased by 47.1% to HKD67.0 million (US$8.6 million), driven by significant growth in hair styling and trimmer product sales, as well as new tooling revenue. Income from operations grew by 57.9% to HKD11.4 million (US$1.5 million), while net income also expanded by 57.9% to HKD9.9 million (US$1.3 million).

The company effectively managed expenses, with a slight decrease in staff costs and reductions in depreciation and selling and marketing costs. Earnings per share increased to HKD0.62, up from HKD0.39 in the previous year. RAY recently completed its IPO, raising total gross proceeds of US$6,452,332.

Positive

• Revenue increased by 47.1% to HKD67.0 million (US$8.6 million)
• Income from operations grew by 57.9% to HKD11.4 million (US$1.5 million)
• Net income expanded by 57.9% to HKD9.9 million (US$1.3 million)
• Earnings per share increased by 59% to HKD0.62
• Successful IPO raised total gross proceeds of US$6,452,332

Negative

• Merchandise costs increased by 52.9% to HKD52.1 million (US$6.7 million)

Insights

Financial Analyst

Raytech Holding's fiscal year 2024 results demonstrate impressive growth and financial strength. Revenue surged by 47.1% to reach HKD67.0 million (US$8.6 million), primarily driven by increased sales in hair styling and trimmer products, along with new tooling revenue. This diversification in revenue streams is a positive sign for the company's future growth prospects.

Notably, the company managed to control costs effectively despite the revenue increase. Income from operations and net income both grew by 57.9%, outpacing revenue growth. This indicates improved operational efficiency and effective cost management. The earnings per share increase of 59% to HKD0.62 is particularly encouraging for investors.

The company's recent IPO, raising gross proceeds of $6,452,332, provides additional capital for future growth initiatives. However, investors should monitor how effectively this capital is deployed to sustain the current growth trajectory.

While the overall picture is positive, there are potential risks to consider:

• The company's revenue is heavily concentrated in hair styling and trimmer products. Diversification into other product lines could help mitigate risk.
• The significant increase in tooling revenue (125.8%) may not be sustainable long-term and could be subject to cyclical demand.
• As a newly public company, Raytech may face challenges in meeting market expectations and maintaining growth rates.

In conclusion, Raytech Holding's strong financial performance and recent capital raise position it well for future growth, but investors should closely monitor its ability to maintain this momentum and diversify its product offerings.

Market Research Analyst

Raytech Holding's impressive growth in the personal care electrical appliances sector reflects broader market trends and consumer behavior shifts. The 47.1% revenue increase, particularly in hair styling and trimmer products, aligns with the growing global demand for personal grooming devices, accelerated by the post-pandemic "self-care" trend.

The company's expansion into tooling services, generating HKD7.0 million in revenue, demonstrates a strategic move to diversify its offerings and capture more value in the supply chain. This vertical integration could provide a competitive edge and potentially higher margins in the long run.

However, it's important to contextualize Raytech's growth within the broader market:

• The global personal care appliances market is highly competitive, with established players like Philips, Panasonic and Braun dominating.
• Raytech's focus on wholesale to international brand owners suggests a B2B model, which may offer stability but could limit direct consumer engagement and brand recognition.
• The company's relatively small size (US$8.6 million in annual revenue) may pose challenges in economies of scale compared to larger competitors.

The recent IPO and listing on Nasdaq could enhance Raytech's visibility and access to capital, potentially facilitating faster expansion and market penetration. However, the company will need to leverage this opportunity effectively to compete with more established brands and potentially explore direct-to-consumer channels to capture more market share.

In conclusion, while Raytech's growth is impressive, its long-term success will depend on its ability to innovate, expand its product range and navigate the competitive landscape of the personal care appliances market.

HONG KONG, July 30, 2024 (GLOBE NEWSWIRE) -- Raytech Holding Limited (the “Company” or “RAY”), a Hong Kong-headquartered company specializing in design, sourcing and wholesale of personal care electrical appliances for international brand owners, today announced its financial results for the fiscal year ended March 31, 2024.

CHING Tim Hoi, CEO and Chairman of the Company, commented, “The Company delivered a robust financial performance in the fiscal year ended March 31, 2024, with revenue increased by a substantial 47.1% to reach HKD67.0 million (US$8.6 million), up from HKD45.5 million in the prior year. This exceptional revenue growth was primarily driven by a significant increase in sales of our hair styling, trimmer product series, as well as new tooling revenue generated from manufacturing a variety of tools, molds, and assembly equipment for our customers.”

“While merchandise costs rose in line with the higher revenue, we were able to effectively manage our selling, general and administrative expenses. In particular, staff costs decreased slightly, and we achieved reductions in certain other expense categories such as depreciation and selling and marketing costs. As a result, income from operations grew by a strong 57.9% to HKD11.4 million (US$1.5 million), and net income likewise expanded by 57.9% to HKD9.9 million (US$1.3 million).”

“We are very pleased with the Company's robust financial performance in fiscal 2024, which demonstrates our ability to drive substantial revenue growth while maintaining disciplined cost control. Going forward, we will continue to focus on expanding our customer base, developing innovative products, and enhancing operational efficiency to deliver sustainable long-term value for our shareholders.”

Selected Fiscal Year 2024 Financial Metrics

		Years Ended March 31,						Changes in
(HKD in millions, except per share data, differences due to rounding.)		2024			2023			Percentage
Revenue		HKD	67.0			45.5		47.1	%
Total operating expenses			55.6			38.3		45.1	%
Income from operations			11.4			7.2		57.9	%
Total other income, net			1.4			0.3		366.7	%
Income before income taxes			12.8			7.5		70.7	%
Net income			9.9			6.3		57.9	%
Earnings per share			0.62			0.39		59.0	%

• Revenue increased by 47.1% to HKD67.0 million for the year ended March 31, 2024, compared with HKD45.5 million for 2023.
• Total operating expenses were HKD55.6 million for the year ended March 31, 2024, increasing from HKD38.3 million for 2023.
• Income from operations grew by 57.9% to HKD11.4 million for the year ended March 31, 2024, from HKD7.2 million for 2023.
• Net income also grew by 57.9% to HKD9.9 million for the year ended March 31, 2024, from HKD6.3 million for 2023. Earnings per share was HKD0.62 for the year ended March 31, 2024, compared to HKD0.39 for 2023.

Revenue

Revenue increased by 47.1% to HKD67.0 million (US$8.6 million) for the year ended March 31, 2024 from HKD45.5 million for the year ended March 31, 2023. The increase was principally driven by a significant increase in sales in our hair styling and trimmer series, and new tooling revenue generated from manufacturing multiple tools, molds and assembly equipment as part of tooling program for our customers, which are mostly driven by engaging new customers.

The following table shows disaggregated revenue by sales of major products and sales of tooling for the years ended March 31, 2024 and 2023.

(HKD in millions, differences due to rounding)		Years Ended March 31,
Sales of products		2024			2023
Hair styling series		HKD	31.8			28.2
Trimmer series			22.7			8.6
Eyelash curler			0.8			1.4
Nail care series			1.4			1.2
Other personal care appliances			3.2			3.0
Sales of tooling			7.0			3.1
Total			66.9			45.5

Operating expenses

Merchandise costs increased by 52.9% to HKD52.1 million (US$6.7 million) for the year ended March 31, 2024 from HKD34.0 million for the year ended March 31, 2023. The increase was in line with the increase in our revenue.

Selling, general and administrative expenses were HKD3.5 million (US$0.5 million) for the year ended March 31, 2024, as compared to HKD4.3 million for the year ended March 31, 2023. The decrease is mainly due to declines in staff costs, selling and marketing expenses, and in depreciation for our property and equipment, which are partially offset by increases in transport and travelling expenses, legal and professional fee and in other general and administrative expenses.

Income from operations

Overall income from operations increased by 57.9% to HKD11.4 million (US$1.5 million) for the year ended March 31, 2024 from HKD7.2 million for the year ended March 31, 2023. The increase was principally driven by a significant increase in sales in our hair styling and trimmer series, and new tooling revenue generated from manufacturing multiple tools, molds and assembly equipment as part of tooling program for our customers as well as engaged new customers.

Total other income, net

Total other income, net, increased by 366.7% to HKD1.4 million (US$178,165) for the year ended March 31, 2024 from HKD0.3 million for the year ended March 31, 2023. The increase was mainly driven by significant growth in interest income.

Provision for income tax expense

Income tax expenses amounted to HKD2.8 million (US$359,959) for the year ended March 31, 2024 and amounted to HKD1.2 million for the year ended March 31, 2023.

Net income

Net income increased by 57.9% to HKD9.9 million (US$1.3 million) for the year ended March 31, 2024 as compared to HKD6.3 million for the year ended March 31, 2023. The increase in net income was predominantly due to an increase in revenue and interest income and a decrease in selling, general and administrative expenses.

Recent development

On May 17, 2024, the Company announced the closing of its initial public offering (the "IPO") of 1,500,000 ordinary shares (the "Ordinary Shares") at a price of $4 per share for total gross proceeds of $6,000,000, before deducting underwriting discounts and other offering expenses. The Ordinary Shares began trading on Nasdaq Capital Market on May 15, 2024, under the ticker symbol "RAY". On July 5, 2024, the Company announced it completed sale of an additional 113,083 ordinary shares pursuant to the partial exercise of the underwriters’ over-allotment option granted in connection with the IPO, at the IPO price of $4 per share, less underwriting discounts. As a result, the Company has raised a total gross proceeds of $6,452,332, before deducting underwriting discounts and offering expenses.

About Raytech Holding Limited

Raytech Holding Limited is a Hong Kong-headquartered company with over 10 years of experience in the personal care electrical appliance industry. Through its operating subsidiary in Hong Kong, it sources and wholesales a diverse range of personal care electrical appliances ranging from hair styling, tooling, trimmer, eyelash curler, neck care, to nail care and other body and facial care appliances for international brand owners, providing integrated product design, production processing, and manufacturing solutions. For more information please visit: https://ir.raytech.com.hk/.

Forward-Looking Statement

This press release contains forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may, "will, "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These forward-looking statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions, and other factors discussed in the “Risk Factors” section of the registration statement and the Annual Report on Form 20-F for the fiscal year ended March 31, 2024 filed with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

Investor Relations

WFS Investor Relations Inc.

Janice Wang, Managing Partner

Email: services@wealthfsllc.com

Phone: +86 13811768599

+1 628 283 9214  

RAYTECH HOLDING LIMITED CONSOLIDATED BALANCE SHEETS
		As of March 31,
		2023			2024			2024
		HKD			HKD			US$
ASSETS
CURRENT ASSETS
Cash and cash equivalents		21,362,580			35,885,666			4,585,500
Accounts receivable, net		6,787,330			14,557,523			1,860,172
Amount due from a director		992,026			145,166			18,550
Merchandise inventories, net		–			1,855,686			237,121
Taxes receivables		514,007			395,005			50,474
Prepayments		95,000			5,000			639
TOTAL CURRENT ASSETS		29,750,943			52,844,046			6,752,456
NON-CURRENT ASSETS
Property and equipment, net		4,868			–			–
Right-of-use assets – operating lease		85,477			–			–
Deferred initial public offering costs		3,176,871			5,252,768			671,203
Long-term deposits		34,200			16,200			2,070
TOTAL NON-CURRENT ASSETS		3,301,416			5,268,968			673,273
TOTAL ASSETS		33,052,359			58,113,014			7,425,729
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		735,528			732,340			93,579
Accounts payable - related party		8,768,420			24,278,340			3,102,306
Accruals		616,078			1,018,618			130,160
Contract liabilities		1,705,854			1,008,415			128,856
Operating lease obligation, current portion		87,972			–			–
TOTAL CURRENT LIABILITIES		11,913,852			27,037,713			3,454,901
OTHER LIABILITIES
Operating lease obligation, net of current portion		–			–			–
TOTAL LIABILITIES		11,913,852			27,037,713			3,454,901
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
Ordinary Shares, US$0.00000625 par value, 8,000,000,000 Ordinary Shares authorized, and 16,000,000 Ordinary Shares issued and outstanding as of March 31, 2023 and 2024, respectively (1)		783			783			100
Additional paid-in capital		99,217			99,217			12,678
Retained earnings		21,038,507			30,975,301			3,958,050
TOTAL SHAREHOLDERS’ EQUITY		21,138,507			31,075,301			3,970,828
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		33,052,359			58,113,014			7,425,729

RAYTECH HOLDING LIMITED CONSOLIDATED STATEMENTS OF INCOME
		For the Years ended March 31,
		2022			2023			2024			2024
		HKD			HKD			HKD			US$
REVENUE
Sales of products		45,105,917			42,382,764			59,966,287			7,662,542
Sales of tooling		–			3,135,475			7,006,014			895,234
Total revenue		45,105,917			45,518,239			66,972,301			8,557,776
OPERATING EXPENSES
Merchandise costs		(33,001,491	)		(34,046,287	)		(52,067,436	)		(6,653,220	)
Selling, general and administrative expenses		(1,379,989	)		(4,277,677	)		(3,545,369	)		(453,030	)
Total operating expenses		(34,381,480	)		(38,323,964	)		(55,612,805	)		(7,106,250	)
INCOME FROM OPERATIONS		10,724,437			7,194,275			11,359,496			1,451,526
OTHER INCOME (EXPENSE)
Interest income		327			143,352			1,416,354			180,983
Interest expense		(1,676	)		(7,151	)		(2,028	)		(259	)
Gain (loss) from foreign currency exchange		452			143,450			(20,846	)		(2,664	)
Government grants		452,250			–			–			–
Other income, net		4,588			–			818			105
Total other income, net		455,941			279,651			1,394,298			178,165
INCOME BEFORE INCOME TAX PROVISION		11,180,378			7,473,926			12,753,794			1,629,691
PROVISION FOR INCOME TAXES		(1,739,988	)		(1,181,056	)		(2,817,000	)		(359,959	)
NET INCOME		9,440,390			6,292,870			9,936,794			1,269,732
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES
Basic and diluted (1)		16,000,000			16,000,000			16,000,000			16,000,000
EARNINGS PER SHARE
Basic and diluted		0.59			0.39			0.62			0.08

(1)

Giving retroactive effect to the 160,000-for-1 share split effected on May 10, 2023.

  

RAYTECH HOLDING LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the Years ended March 31,
		2022			2023			2024			2024
		HKD			HKD			HKD			US$
Cash flows from operating activities
Net income		9,440,390			6,292,870			9,936,794			1,269,732
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of plant and equipment		20,433			13,924			4,868			622
Amortization of right-of-use asset		17,095			102,573			85,477			10,922
Gain from unrealized foreign currency translation		(452	)		178,454			(61,043	)		(7,799	)
Changes in operating assets and liabilities
Accounts receivable, net		(4,060,535	)		(907,711	)		(7,755,205	)		(990,967	)
Merchandise inventories, net		1,947,812			–			(1,855,686	)		(237,121	)
Prepayments		(90,000	)		(5,000	)		90,000			11,500
Long-term deposits		(17,200	)		(5,200	)		18,000			2,300
Accounts payable		130,100			(119,019	)		(5,441	)		(695	)
Accounts payable - related party		1,035,048			4,682,655			15,554,384			1,987,552
Accruals		–			566,078			402,540			51,437
Contract liabilities		–			1,705,854			(697,439	)		(89,119	)
Operating lease obligation		(16,324	)		(100,849	)		(87,972	)		(11,241	)
Taxes payables		(177,423	)		(1,442,797	)		119,002			15,206
Net cash provided by operating activities		8,228,944			10,961,832			15,748,279			2,012,329
Cash flows from investing activities
Purchase of property and equipment		(11,700	)		–			–			–
Repayment by the director		2,215,728			1,444,872			846,860			108,212
Net cash provided by investing activities		2,204,028			1,444,872			846,860			108,212
Cash flows from financing activities
Deferred initial public offering cost		–			(3,176,871	)		(2,075,897	)		(265,260	)
Dividend payments		(1,558,000	)		–			–			–
Net cash used in financing activities		(1,558,000	)		(3,176,871	)		(2,075,897	)		(265,260	)
Change in cash		8,874,972			9,229,833			14,519,242			1,855,281
Effect of foreign exchange on cash		–			(157,725	)		3,844			491
Cash at the beginning of the year		3,415,500			12,290,472			21,362,580			2,729,728
Cash at the end of the year		12,290,472			21,362,580			35,885,666			4,585,500
Supplementary cash flow information
Cash paid for income tax		2,144,284			2,619,407			2,697,998			344,752
Cash paid for interest expense		–			–			–			–

FAQ

What was Raytech Holding's (RAY) revenue for the fiscal year ended March 31, 2024?

Raytech Holding's revenue for the fiscal year ended March 31, 2024, was HKD67.0 million (US$8.6 million), representing a 47.1% increase from the previous year.

How much did Raytech Holding's (RAY) net income grow in fiscal year 2024?

Raytech Holding's net income grew by 57.9% to HKD9.9 million (US$1.3 million) for the fiscal year ended March 31, 2024.

What was the earnings per share (EPS) for Raytech Holding (RAY) in fiscal year 2024?

Raytech Holding's earnings per share for the fiscal year ended March 31, 2024, was HKD0.62, compared to HKD0.39 in the previous year.

When did Raytech Holding (RAY) complete its initial public offering (IPO)?

Raytech Holding completed its initial public offering on May 17, 2024, with its ordinary shares beginning trading on the Nasdaq Capital Market on May 15, 2024.