Karin Technology Holdings reported lower sales for its FY2025 but was able to maintain earnings in the same year ended June 30.
Revenue was down 12.4% y-oy to HK$1.93 billion, with softer sales across its three main segments: IT infrastructure, components distribution and consumer electronics products.
However, gross margin increased by 0.7 percentage points to 9.2, which helped hold earnings at HK$19.2 million, up 1% versus the preceding FY2024.
The bottom line was supported by higher interest income and lower administrative costs as well.
Similarly, the company held its total FY2025 dividend steady at 8.78 HK cents, equivalent to a payout ratio of 98.7%.
As at June 30, cash and equivalents increased slightly to HK$144 million from HK#127.2 million; gearing ratio improved to 0.14 times from 0.26 times.
EO and executive director Michael Ng says that while revenue from the company's IT segment declined in FY2025, profitability improved due to higher margins on some deals.
"We will focus on pursuing favourable margins as we strive to offer more value-added services, particularly in the area of AI solutions," he says.
Ng notes that the component distribution segment was hurt by trade tensions, and that Karin remains cautious about this business and will try and improve cost control.
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"Meanwhile, in view of the lacklustre retail landscape in Hong Kong, we are closely monitoring the business of our consumer electronics segment," he adds.
Going foward, Karin Technology observes that while lower interest rates have eased financial costs, recessionary pressures persist and business demand remains subdued.
"Notwithstanding the above challenges, Karin believes its IT segment will drive its future growth as the group expands its strategic focus on AI," the company says, adding that it is "actively" pursuing new distributorships to expand its AI solutions portfolio.
The distribution segment, meanwhile, will face sustained pressure as the economic landscape remains restrained in mainland China, with manufacturing clients adopting a conservative approach to procurement and forecasting.
"This cautious stance is especially pronounced among exporters, who face heightened vulnerability to trade disruptions and policy shifts," the company says.
Last but not least, the consumer electronics segment "may be further dampened" by reduced foot traffic and spending from tourists, as well as ongoing store closures in Hong Kong’s retail scene.
The company will prioritise profitability through disciplined inventory management, strategic purchasing, and stringent cost controls.
Karin Technology shares closed at 30 cents on Aug 29, unchanged for the day and up 5.36% year to date.
