The company is navigating a strategic pivot with a 7.71% revenue growth rate and a 41.16% gross margin that suggests a shift toward a platform-based service model.
Santech Holdings Limited (STEC) annual income statement — 6-year revenue, gross profit & net income history
| Metric | Jun'23 | Jun'22 | Jun'21 | Jun'20 | Jun'19 | Jun'18 |
|---|
| Sales/Revenue | 2.09B | 1.94B | 1.83B | 1.28B | 1.15B | 1.15B |
| Revenue Growth % | 7.71% | 5.87% | 42.77% | 12.06% | -0.42% | - |
| Cost of Goods Sold | 1.23B | 1.05B | 1B | 708.65M | 624.53M | 561.92M |
| COGS % of Revenue | 58.84% | 54.29% | 54.68% | 55.15% | 54.47% | 48.8% |
| Gross Profit | 860.9M | 887.75M | 831.36M | 576.21M | 522.08M | 589.48M |
| Gross Margin % | 41.16% | 45.71% | 45.32% | 44.85% | 45.53% | 51.2% |
| Gross Profit Growth % | -3.02% | 6.78% | 44.28% | 10.37% | -11.43% | - |
| Operating Expenses | 663.51M | 561.06M | 549.75M | 417.16M | 412.57M | 497.45M |
| OpEx % of Revenue | 31.72% | 28.89% | 29.97% | 32.47% | 35.98% | 43.2% |
| Selling, General & Admin | 625.89M | 561.06M | 549.75M | 417.16M | 412.57M | 497.45M |
| SG&A % of Revenue | 29.92% | 28.89% | 29.97% | 32.47% | 35.98% | 43.2% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - |
| Other Operating Expenses | 37.62M | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 197.38M | 326.69M | 281.61M | 159.05M | 109.51M | 92.03M |
| Operating Margin % | 9.44% | 16.82% | 15.35% | 12.38% | 9.55% | 7.99% |
| Operating Income Growth % | -39.58% | 16.01% | 77.06% | 45.23% | 19% | - |
| EBITDA | 251.66M | 355.02M | 307.2M | 185.25M | 137.95M | 124.92M |
| EBITDA Margin % | 12.03% | 18.28% | 16.75% | 14.42% | 12.03% | 10.85% |
| EBITDA Growth % | -29.11% | 15.57% | 65.83% | 34.29% | 10.43% | - |
| D&A (Non-Cash Add-back) | 54.27M | 28.33M | 25.59M | 26.21M | 28.43M | 32.89M |
| EBIT | 235.01M | 326.69M | 281.61M | 159.05M | 109.51M | 92.03M |
| Net Interest Income | 1.35M | 1.5M | 1.54M | 325K | 769K | 2.38M |
| Interest Income | 1.35M | 1.5M | 1.54M | 325K | 769K | 2.38M |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -5.74M | -2.24M | 14.14M | -2.13M | -10.04M | -5.63M |
| Pretax Income | 191.65M | 324.45M | 295.75M | 156.91M | 99.47M | 86.4M |
| Pretax Margin % | 9.16% | 16.71% | 16.12% | 12.21% | 8.68% | 7.5% |
| Income Tax | 71.38M | 88.58M | 88.09M | 50.76M | 38.01M | 44.31M |
| Effective Tax Rate % | 37.24% | 27.3% | 29.79% | 32.35% | 38.21% | 51.29% |
| Net Income | 120.27M | 235.87M | 207.66M | 106.15M | 61.46M | 42.09M |
| Net Margin % | 5.75% | 12.14% | 11.32% | 8.26% | 5.36% | 3.66% |
| Net Income Growth % | -49.01% | 13.59% | 95.62% | 72.72% | 46.03% | - |
| Net Income (Continuing) | 120.27M | 235.87M | 207.66M | 106.15M | 61.46M | 42.09M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 131.53M | 30.6M | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 8.30 | 16.28 | 15.52 | 7.58 | 4.38 | 3.00 |
| EPS Growth % | -49.02% | 4.9% | 104.75% | 73.06% | 46% | - |
| EPS (Basic) | 8.60 | 16.84 | 16.10 | 7.58 | 4.38 | 3.00 |
| Diluted Shares Outstanding | 14.49M | 14.49M | 13.39M | 14M | 14M | 14M |
| Basic Shares Outstanding | 14M | 14M | 12.89M | 14M | 14M | 14M |
| Dividend Payout Ratio | - | - | - | - | - | - |
Quick answers to the most common questions about buying STEC stock.
For fiscal year 2022, Santech Holdings Limited (STEC) reported total revenue of $2.09B. This represents a 81.7% increase compared to $1.15B in 2017.
Santech Holdings Limited (STEC) is profitable, generating $120.3M in net income for the fiscal year ending 2022 with a net profit margin of 5.7%.
Santech Holdings Limited (STEC) reported an operating income of $197.4M, resulting in an operating profit margin of 9.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Santech Holdings Limited (STEC) generated $860.9M in gross profit for the year, representing a gross profit margin of 41.2%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Regulatory pivot execution risk
Revenue Transition Amidst Strategic Pivot
As reported in recent financial disclosures, Santech Holdings Limited achieved a 7.71% revenue growth rate, reflecting a complex transition from legacy wealth management commissions toward new retail and digital platform initiatives that currently define the firm's evolving business model within the Chinese technology sector.
The reported growth suggests that the company is successfully leveraging its legacy high-net-worth client base to seed its new retail platform. However, investors should monitor whether this growth is sustainable as the legacy financial services revenue stream likely faces continued contraction.
Structural Margin Profile Under Review
Based on the company's reported figures, Santech maintains a 41.16% gross margin, which appears to be a byproduct of its shift toward a platform-based service model rather than the capital-intensive inventory structures typically associated with traditional retail or manufacturing entities in the region.
This margin profile suggests a degree of pricing power inherent in the company's digital service offerings. Analysts should remain cautious, as any further integration into lower-margin social e-commerce segments may exert downward pressure on these current profitability levels.
Operating Efficiency During Corporate Restructuring
According to the latest financial data, the company's 9.44% operating margin indicates significant administrative overhead, which likely stems from the costs associated with the recent rebranding and the ongoing operational restructuring required to pivot from financial services to a technology-focused metaverse and retail entity.
The current operating margin suggests that the firm is absorbing substantial costs to build out its new software infrastructure. Investors should investigate whether these expenses are temporary integration costs or if they represent a permanent increase in the company's structural cost base.
Risks Inherent in Business Model Pivot
While the company reports a substantial $868M cash position, the lack of transparency regarding potential legacy liabilities from the Hywin era warrants further investigation, as these undisclosed obligations could potentially impair the firm's ability to fund its ambitious technology-driven retail and metaverse growth strategy.
Short-sellers may focus on the possibility that the current revenue growth is merely a 'legacy tail' masking the actual performance of the new tech segments. The market's inability to assign a stable valuation suggests that the pivot remains an unproven, high-risk endeavor.