The firm's 2.25% year-over-year revenue decline reflects broader market cooling, though it sustains a 58.91% gross margin through specialized digital asset production.
| Metric | Dec'24 | Dec'23 | Dec'22 |
|---|
| Sales/Revenue | 2.76M | 2.83M | 815.09K |
| Revenue Growth % | -2.25% | 246.65% | - |
| Cost of Goods Sold | 1.13M | 1.27M | 246.78K |
| COGS % of Revenue | 41.09% | 44.94% | 30.28% |
| Gross Profit | 1.63M | 1.56M | 568.32K |
| Gross Margin % | 58.91% | 55.06% | 69.72% |
| Gross Profit Growth % | 4.57% | 173.74% | - |
| Operating Expenses | 1.11M | 473.71K | 96.33K |
| OpEx % of Revenue | 40.23% | 16.77% | 11.82% |
| Selling, General & Admin | 1.11M | 473.71K | 96.33K |
| SG&A % of Revenue | 40.23% | 16.77% | 11.82% |
| Research & Development | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - |
| Other Operating Expenses | 0 | 0 | 0 |
| Operating Income | 515.89K | 1.08M | 471.99K |
| Operating Margin % | 18.68% | 38.29% | 57.91% |
| Operating Income Growth % | -52.32% | 129.24% | - |
| EBITDA | 602.82K | 1.15M | 482.15K |
| EBITDA Margin % | 21.83% | 40.83% | 59.15% |
| EBITDA Growth % | -47.74% | 139.26% | - |
| D&A (Non-Cash Add-back) | 86.93K | 71.58K | 10.16K |
| EBIT | 515.89K | 1.08M | 471.99K |
| Net Interest Income | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 0 |
| Other Income/Expense | 930 | 605 | 1 |
| Pretax Income | 516.82K | 1.08M | 471.99K |
| Pretax Margin % | 18.71% | 38.32% | 57.91% |
| Income Tax | 137.39K | 157.05K | 52.51K |
| Effective Tax Rate % | 26.58% | 14.51% | 11.13% |
| Net Income | 379.43K | 925.56K | 419.48K |
| Net Margin % | 13.74% | 32.76% | 51.46% |
| Net Income Growth % | -59.01% | 120.65% | - |
| Net Income (Continuing) | 379.43K | 925.56K | 419.48K |
| Discontinued Operations | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 |
| EPS (Diluted) | 0.01 | 0.03 | 0.02 |
| EPS Growth % | -59.03% | 120.89% | - |
| EPS (Basic) | 0.01 | 0.03 | 0.02 |
| Diluted Shares Outstanding | 26.5M | 26.5M | 26.5M |
| Basic Shares Outstanding | 26.5M | 26.5M | 26.5M |
| Dividend Payout Ratio | - | - | - |
Client concentration and liquidity
As reported in recent financial disclosures, EDHL experienced a 2.25% year-over-year revenue decline, signaling that the firm's reliance on project-based digital asset creation for the Hong Kong real estate sector is facing headwinds from a broader cooling in local property transaction volumes and developer marketing budgets.
The negative growth trajectory suggests that the company's niche specialization in VR and metaverse-linked marketing is struggling to offset the cyclical downturn in its primary client base. Investors should monitor whether this contraction represents a temporary delay in project milestones or a structural shift in how developers allocate their digital transformation budgets.
Based on the company's reported figures, EDHL maintains a robust gross margin of 58.91%, which highlights the efficiency of its digital-first delivery model compared to traditional exhibition firms that must contend with the significant capital intensity of physical infrastructure and logistics in the Hong Kong market.
While the gross margin is impressive, the 18.68% operating margin indicates that overhead costs remain substantial relative to the firm's small revenue base. This suggests that the company has yet to achieve the operational scale necessary to leverage its technical expertise into a more profitable, recurring revenue stream.
According to the provided financial data, EDHL's cost structure is heavily weighted toward technical talent and specialized labor, which is necessary to maintain its competitive edge in the high-end VR and AR production space within the competitive and expensive Hong Kong labor market.
The firm's ability to maintain a double-digit net margin of 13.74% despite a small revenue base points to disciplined expense management. However, the reliance on bespoke project work means that any increase in talent acquisition costs could rapidly erode these margins, as the company lacks the scale to absorb significant wage inflation.
With cash and equivalents totaling only $389,651, the company's financial position appears precarious, as noted in recent filings, leaving little room for error should major clients experience payment delays or if the firm faces a prolonged period of inactivity in the Hong Kong property market.
Short-sellers would likely focus on the mismatch between the company's project-based revenue recognition and its thin cash buffer. The reliance on a small circle of institutional clients creates a binary risk profile where the loss of a single major contract could jeopardize the firm's ability to fund ongoing operations.
Quick answers to the most common questions about buying EDHL stock.
For fiscal year 2024, Everbright Digital Holding Limited Ordinary Shares (EDHL) reported total revenue of $2.8M. This represents a 238.8% increase compared to $0.8M in 2022.
Everbright Digital Holding Limited Ordinary Shares (EDHL) is profitable, generating $0.4M in net income for the fiscal year ending 2024 with a net profit margin of 13.7%.
Everbright Digital Holding Limited Ordinary Shares (EDHL) reported an operating income of $0.5M, resulting in an operating profit margin of 18.7%. This margin reflects the operational efficiency of the business before interest and taxes.
Everbright Digital Holding Limited Ordinary Shares (EDHL) generated $1.6M in gross profit for the year, representing a gross profit margin of 58.9%. This demonstrates the company's core pricing power and production efficiency.