EX-99.1 2 ea022685701ex99-1_reitar.htm PRESS RELEASE ANNOUNCING FIRST HALF OF FISCAL YEAR 2024 UNAUDITED FINANCIAL RESULTS

Exhibit 99.1

 

Reitar Logtech Holdings Limited Announces First Half of Fiscal Year 2024 Unaudited Financial Results

 

Reitar Logtech Holdings Limited (Nasdaq: RITR) (“we,” or the “Company”), a comprehensive logistics solutions provider in Hong Kong, today announced its unaudited financial results for the six months ended September 30, 2024.

 

Overview:

 

Revenue increased by approximately 163.7% from approximately HK$73.7 million for the six months ended September 30, 2023 to approximately HK$194.2 million (US$25.0 million) for the six months ended September 30, 2024.

 

Cost of service increased by approximately 192.4% from approximately HK$48.1 million for the six months ended September 30, 2023 to approximately HK$140.6 million (US$18.1 million) for the six months ended September 30, 2024.

 

Net income increased by approximately 636.4% from approximately HK$3.3 million for the six months ended September 30, 2023 to approximately HK$24.3 million (US$3.1 million) for the six months ended September 30, 2024.

 

The Company has experienced significant revenue growth in the first half of fiscal year 2024 compared to the same period last fiscal year. This growth primarily stems from our strategic shift from focusing on small to medium-sized projects prior to 2023 to investing and developing large-scale projects in collaboration with international real estate and private equity funds.

 

The Company is currently developing and upgrading three major smart logistics projects in Hong Kong. These include an automated logistics center co-developed with a Singapore-based private equity fund, Hong Kong’s first large-scale automated cold storage facility converted from a large industrial building, and an upgrade to a major smart logistics center on Airport Island. The automated cold storage facility, co-invested with an international private equity-backed fund manager, was completed in December 2024 and is expected to significantly advance the development of cold chain logistics in Hong Kong. The automated logistics center, developed with another Singapore-based private equity fund, is set to begin superstructure construction in Q1 2025 and will be the largest of its kind in Hong Kong. Meanwhile, the upgrade of the Airport Island smart logistics center is expected to finish by the end of Q3 2025. This airport project is particularly significant as its contract amount already represents approximately 91.7% of our revenue for the fiscal year ended March 31, 2024.

 

In these projects, the Company leverages its market-leading Property + Logistics Technology (PLT) solutions, collaborating with various subsidiaries to provide comprehensive services. The Company plays multiple roles, including asset manager, chief consultant, project and engineering manager, and general contractor, with a commitment to delivering one-stop, comprehensive smart logistics asset management services. As one of the first companies in Hong Kong to enter the PLT field, the Company is dedicated to enhancing the potential value of logistics assets through logistics technology, driving innovation and efficiency within the logistics sector, strengthening overall supply chain capabilities, and further solidifying Hong Kong’s position as a global logistics hub.

 

 

Six Month Financial Results Ended September 30, 2024

 

Revenue

 

The following table sets forth the breakdown of our revenue for the periods indicated:

 

   Six months ended
September 30,
 
   2023   2024   2024 
   HK$   HK$   US$ 
Service lines:            
Construction management and engineering design services:            
Construction management and engineering design services   63,818,142    182,906,870    23,542,259 
Maintenance services   4,137,120    3,845,705    494,987 
Sub-total   67,955,262    186,752,575    24,037,246 
                
Asset management and professional consultancy services:               
Asset management services   2,136,767    2,995,000    385,492 
Professional consultancy services.   3,571,042    4,472,102    575,612 
Sub-total   5,707,809    7,467,102    961,104 
                
Total   73,663,071    194,219,677    24,998,350 

 

Revenue increased by approximately 163.7% from approximately HK$73.7 million for the six months ended September 30, 2023 to approximately HK$194.2 million (US$25.0 million) for the six months ended September 30, 2024. The increase was mainly due to the increase in revenue generated from construction management and engineering design services because (a) certain major projects which was in initial stage for the six months ended September 30, 2023 was close to completion for the six months ended September 30, 2024 and (b) more new major construction projects were obtained for the six months ended September 30, 2024.

 

Cost of revenue

 

The following table presents our cost of revenue by service lines for the periods indicated:

 

   Six months ended
September 30,
 
   2023   2024   2024 
   HK$   HK$   US$ 
Service lines:            
Construction management and engineering design services:            
Construction management and engineering design services   42,958,378    133,990,601    17,246,161 
Maintenance services   1,382,351    2,329,177    299,793 
Sub-total   44,340,729    136,319,778    17,545,954 
                
Asset management and professional consultancy services:               
Asset management services   1,621,817    2,084,256    268,268 
Professional consultancy services.   2,118,436    2,171,175    279,456 
Sub-total   3,740,253    4,255,431    547,724 
                
Total   48,080,982    140,575,209    18,093,678 

 

2

 

The following table presents our cost of revenue by nature for the periods indicated:

 

   Six months ended
September 30,
 
   2023   2024   2024 
   HK$   HK$   US$ 
Subcontracting fee   36,565,103    128,345,474    16,519,567 
Staff cost   8,906,565    10,741,087    1,382,503 
Others   2,609,314    1,488,648    191,608 
                
Total cost of revenue   48,080,982    140,575,209    18,093,678 

 

Cost of service increased by approximately 192.4% from approximately HK$48.1 million for the six months ended September 30, 2023 to approximately HK$140.6 million (US$18.1 million) for the six months ended September 30, 2024. The trend of cost of revenue of each of the service lines was in line with the trend of the revenue of respective service line during the period.

 

Operating expenses

 

The following table sets forth components of our operating expenses for the periods indicated:

 

   Six months ended
September 30,
 
   2023   2024   2024 
   HK$   HK$   US$ 
Management fee   446,499    446,499    57,470 
Salary and allowance   6,727,012    8,417,023    1,083,370 
Depreciation of property and equipment   1,130,744    1,197,901    154,184 
Amortization of operating lease right-of-use assets   1,374,635    1,343,000    172,860 
Professional fee   154,559    688,363    88,601 
Allowance for doubtful accounts/expected credit loss   2,332,210    9,647,473    1,241,742 
Others   1,753,475    2,919,740    375,804 
                
Total cost of revenue   13,919,134    24,659,999    3,174,031 

 

Operating expenses increased by approximately 77.2% from approximately HK$13.9 million for the six months ended September 30, 2023 to approximately HK$24.7 million (US$3.2 million) for the six months ended September 30, 2024. The increase was mainly due to (i) increase in staff costs resulting from increase in payroll and bonus to our staff and (ii) increase in expected credit loss on contracts receivable and contract assets which was in line with the increase in revenue.

 

Other income, net.

 

We recorded other income, net of approximately HK$0.5 million (US$62,000) for the six months ended September 30, 2024 in comparison to other expenses, net of approximately HK$1.8 million for the six months ended September 30, 2023, mainly attributable to (i) the absence of impairment loss on goodwill of approximately HK$1.5 million; (ii) increase in bank interest income due to increase in cash balancesand (iii) the increase in government subsidies in relation to innovation and technology granted by the Hong Kong Government.

 

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Income tax expense.

 

Income tax expense decreased by approximately 21.0% from approximately HK$6.6 million for the six months ended September 30, 2023 to approximately HK$ 5.2 million (US$0.7 million) for the six months ended September 30, 2024. The decrease was mainly due to the increase in deductible expenses as compared to prior period.

 

Net income.

 

As a result of the above reasons, net income increased by approximately 636.4% from approximately HK$3.3 million for the six months ended September 30, 2023 to approximately HK$24.3 million (US$3.1 million) for the six months ended September 30, 2024.

 

Basic and diluted EPS.

 

Basic and diluted EPS were approximately HK$0.40 (US$0.05) per ordinary share for the six months ended September 30, 2024, as compared to HK$0.05 per ordinary share for the six months ended September 30, 2023, respectively.

 

About Reitar Logtech Holdings Limited

 

The Company, through its wholly owned subsidiaries, is engaged in (i) provision of construction management and engineering design services and (ii) asset management and investment, and professional consultancy services in Hong Kong. The products from provision of construction management and engineering design services are cold storage facilities, automated warehouses, renovated offices and tailor-made electrical systems. The services from asset management and professional consultancy services are asset management services for construction projects involving refrigerated storage and warehouses and professional consultancy services for construction projects involving renovation work, interior design and modification work of commercial units and residential or commercial redevelopment work.

 

For more information, visit the Company’s website at https://www.reitar.io/.

 

Exchange Rate Information

 

This announcement contains translations of certain HK$ amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from HK$ to US$ were made at the rate of HK$7.7693 to US$1.00, the exchange rate on September 30, 2024 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the HK$ or US$ amounts referred could be converted into US$ or HK$, as the case may be, at any particular rate or at all.

 

Safe Harbor Statement

 

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC, which are available for review at www.sec.gov.

 

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REITAR LOGTECH HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2024 AND SEPTEMBER 30, 2024

 

   As of
March 31,
2024
   As of
September 30,
2024
   As of
September 30,
2024
 
   HK$   HK$   US$ 
ASSETS            
CURRENT ASSETS            
Cash and cash equivalents   6,390,861    30,476,559    3,922,690 
Restricted cash   18,059,262    18,421,799    2,371,102 
Contracts receivable, net   27,414,118    86,158,630    11,089,626 
Contract assets, net   59,554,163    89,897,615    11,570,877 
Retention receivables, net   332,567    600,809    77,331 
Prepaid expenses and other receivables, net   75,697,151    89,538,545    11,524,660 
Total current assets   187,448,122    315,093,957    40,556,286 
                
NON-CURRENT ASSETS               
Long-term investment, net   10,508,785    10,934,785    1,407,436 
Property and equipment, net   4,516,544    3,340,253    429,930 
Right-of-use assets, net   5,224,696    3,881,696    499,620 
Rental deposits, net   1,059,466    1,059,466    136,366 
Goodwill   34,066,838    34,066,838    4,384,801 
Total non-current assets   55,376,329    53,283,038    6,858,153 
Total assets   242,824,451    368,376,995    47,414,439 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY               
CURRENT LIABILITIES               
Bank borrowings   40,853,575    54,563,734    7,022,992 
Accounts payable   22,733,798    46,538,918    5,990,104 
Accrued expenses and other payables   6,203,617    3,266,501    420,437 
Tax payable   8,737,661    13,416,592    1,726,873 
Contract liabilities   59,363,407    64,090,159    8,249,155 
Operating lease liabilities   2,859,872    3,081,188    396,585 
Amount due to related parties   1,648,401    2,094,837    269,630 
Total current liabilities   142,400,331    187,051,929    24,075,776 
                
NON-CURRENT LIABILITIES               
Operating lease liabilities   2,364,824    800,507    103,035 
Total non-current liabilities   2,364,824    800,507    103,035 
Total liabilities   144,765,155    187,852,436    24,178,811 
                
COMMITMENTS AND CONTINGENCIES               
                
SHAREHOLDERS’ EQUITY               
Ordinary shares: US$0.00000005 par value, 1,000,000,000,000 shares authorized as of March 31, 2024 and September 30, 2024, 60,000,000 shares issued and outstanding as of March 31, 2024 and 62,443,750 shares issued and outstanding as of September 30, 2024               
Class A ordinary shares, US$0.00000005 par value, 900,000,000,000 shares authorized, and 40,000,000 shares issued and outstanding as of March 31, 2024 and 42,443,750 shares issued and outstanding as of September 30, 2024   16    17    2 
Class B ordinary shares, US$0.00000005 par value, 100,000,000,000 shares authorized, and 20,000,000 shares issued and outstanding as of March 31, 2024 and September 30, 2024   8    8    1 
Additional paid-in capital   8,404,870    66,610,292    8,573,526 
Retained earnings   89,887,738    114,274,817    14,708,509 
Equity attributable to owners of the Company   98,292,632    180,885,134    23,282,038 
Non-controlling interests   (233,336)   (360,575)   (46,410)
Total shareholders’ equity   98,059,296    180,524,559    23,235,628 
Total liabilities and shareholders’ equity   242,824,451    368,376,995    47,414,439 

 

5

 

REITAR LOGTECH HOLDINGS LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2024

 

   For the six months ended
September 30,
 
   2023   2024   2024 
   HK$   HK$   US$ 
REVENUE            
– External   73,663,071    194,219,677    24,998,350 
Total revenue   73,663,071    194,219,677    24,998,350 
                
COST OF REVENUE               
– External   (48,080,982)   (128,577,254)   (16,549,401)
– Related parties       (11,997,955)   (1,544,277)
Total cost of revenue   (48,080,982)   (140,575,209)   (18,093,678)
Gross profit   25,582,089    53,644,468    6,904,672 
                
OPERATING EXPENSES               
Personnel and benefit expense   (6,727,012)   (8,417,023)   (1,083,370)
Depreciation of property and equipment   (1,130,744)   (1,197,901)   (154,184)
Amortization of operating lease right-of-use assets   (1,374,635)   (1,343,000)   (172,860)
Professional fee   (154,559)   (688,363)   (88,601)
Allowance for doubtful accounts/expected credit loss   (2,332,210)   (9,647,473)   (1,241,742)
Others   (2,199,974)   (3,366,239)   (433,274)
Total operating expenses   (13,919,134)   (24,659,999)   (3,174,031)
INCOME FROM OPERATION   11,662,955    28,984,469    3,730,641 
                
OTHER INCOME (EXPENSES)               
Bank interest income   14    363,996    46,851 
Interest expense   (273,267)   (659,519)   (84,888)
Other income       784,212    100,938 
Other expense       (3,524)   (454)
Impairment loss on goodwill   (1,500,000)        
Total other (expenses) income, net   (1,773,253)   485,165    62,447 
INCOME BEFORE INCOME TAX EXPENSES   9,889,702    29,469,634    3,793,088 
                
INCOME TAX EXPENSES   (6,595,390)   (5,209,794)   (670,562)
NET INCOME   3,294,312    24,259,840    3,122,526 
Add: net loss attributable to non-controlling interests   (540,939)   (127,239)   (16,377)
NET INCOME ATTRIBUTABLE TO THE COMPANY’S ORDINARY SHAREHOLDERS AND TOTAL COMPREHENSIVE INCOME   3,835,251    24,387,079    3,138,903 
                
Weighted average number of ordinary shares:               
Basic and diluted   60,000,000    60,485,963    60,485,963 
Earnings per ordinary share – basic and diluted   0.05    0.40    0.05 

 

6

 

REITAR LOGTECH HOLDINGS LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2024

 

   Ordinary shares          Total Reitar Logtech Holdings       
   Class A
No. of
shares
   Par value   Class B
No. of
shares
   Par value   Additional
paid-in
capital
   Retained earnings   Limited
shareholders’
equity
   Non-
controlling
interests
   Total
shareholder’
equity
 
       HK$       HK$   HK$   HK$   HK$   HK$   HK$ 
BALANCE, April 1, 2023   40,000,000    16    20,000,000    8    8,404,870    70,128,292    78,533,186    (101,880)   78,431,306 
Net income                       3,835,251    3,835,251    (540,939)   3,294,312 
BALANCE, September 30, 2023   40,000,000    16    20,000,000    8    8,404,870    73,963,543    82,368,437    (642,819)   81,725,618 
                                              
BALANCE, April 1, 2024   40,000,000    16    20,000,000    8    8,404,870    89,887,738    98,292,632    (233,336)   98,059,296 
Net proceeds from initial public offering   2,443,750    1            58,205,422        58,205,423        58,205,423 
Net income (loss)                       24,387,079    24,387,079    (127,239)   24,259,840 
BALANCE, September 30, 2024   42,443,750    17    20,000,000    8    66,610,292    114,274,817    180,885,134    (360,575)   180,524,559 
BALANCE, September 30, 2024 (US$)        2         1    8,573,526    14,708,509    23,282,038    (46,410)   23,235,628 

 

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REITAR LOGTECH HOLDINGS LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2024

 

   For the six months ended
September 30,
 
   2023   2024   2024 
   HK$   HK$   US$ 
Cash flows from operating activities            
Net income   3,294,312    24,259,840    3,122,526 
Adjustments to reconcile net income to net cash provided by operating activities               
Depreciation of property and equipment   1,130,744    1,197,901    154,184 
Amortization of operating lease right-of-use assets   1,374,635    1,343,000    172,860 
Allowance for doubtful accounts/expected credit loss   2,332,210    9,647,473    1,241,742 
Bad debt   80,000         
Impairment loss on goodwill   1,500,000         
Changes in operating assets and liabilities               
Contracts receivable   (25,762,602)   (65,175,791)   (8,388,888)
Contract assets   10,565,703    (30,979,625)   (3,987,439)
Retention receivables   (34,537)   (275,151)   (35,415)
Prepaid expenses and other receivables   (21,591,766)   (23,002,467)   (2,960,688)
Accounts payable   (11,312,586)   23,805,120    3,063,998 
Accrued expenses   16,868,848    (2,937,116)   (378,041)
Contract liabilities   (4,302,020)   4,726,752    608,388 
Tax payable   3,843,798    4,678,931    602,233 
Operating lease liabilities   (1,154,092)   (1,488,330)   (191,566)
Net cash used in operating activities   (23,167,353)   (54,199,463)   (6,976,106)
Cash flows from investing activities               
Purchase of property and equipment   (64,348)   (21,610)   (2,781)
Acquisition of a subsidiary   (1,500,000)        
Long-term investment   (10,163,784)   (426,000)   (54,831)
Loan to a third party       (1,300,000)   (167,325)
Net cash used in investing activities   (11,728,132)   (1,747,610)   (224,937)
Cash flows from financing activities               
Proceeds from bank borrowings   13,684,500    102,026,614    13,132,021 
Repayment for bank borrowings   (769,670)   (88,316,455)   (11,367,363)
Deferred offering costs   (2,969,708)   8,033,290    1,033,979 
Proceeds from initial public offering, net       58,205,423    7,491,720 
Advance to related parties   (4,100,000)        
Repayment from related parties   4,499,559    446,436    57,461 
Net cash generated from financing activities   10,344,681    80,395,308    10,347,818 
Net (decrease) increase in cash and cash equivalents and restricted cash   (24,550,804)   24,448,235    3,146,775 
Cash, cash equivalents and restricted cash at the beginning of the period   46,613,240    24,450,123    3,147,017 
Cash, cash equivalents and restricted cash at the end of the period   22,062,436    48,898,358    6,293,792 
                
Supplementary cash flow information               
Interest received   14    363,996    46,851 
Interest paid   (273,267)   (659,519)   (84,888)
Income tax paid   (2,751,592)   (530,863)   (68,328)

 

8

 

REITAR LOGTECH HOLDINGS LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2024

 

Reconciliation of cash, cash equivalents and restricted cash:

 

   As of September 30, 
   2023   2024   2024 
   HK$   HK$   US$ 
Cash and cash equivalents   20,062,436    30,240,859    3,892,353 
Restricted cash   2,000,000    18,421,799    2,371,102 
Total cash, cash equivalents and restricted cash shown in the statement of cash flows   22,062,436    48,662,658    6,263,455 

 

9