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

About this update from Raytech Holding Limited

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: [email protected] 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 – – – – Source: Raytech Holding Limited

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