FAST NEWS: Readboy swings to red on lower smart device sales

August 14, 2023

2385.HK

Smart learning device maker Readboy Education said Sunday it expects to record a non-GAAP adjusted loss of 15 million yuan to 20 million yuan in the first half of this year.

The latest: Smart learning device maker Readboy Education Holding Co. Ltd. (2385.HK) said Sunday it expects to record a non-GAAP adjusted loss of 15 million yuan ($2.07 million) to 20 million yuan in the first half of this year, far worse than the adjusted profit of 17.5 million yuan recorded in the same period last year.

Looking up: The company’s gross margin improved in the first half of the year due to higher pricing of new products and an increased share of sales on proprietary platform, which partially offset the unfavorable impact of lower sales.

Take Note: Its earnings performance was affected by the impact of the international environment on the domestic economy, the decrease in sales of personal student tablets and wearable products as some customers adopted a more cautious attitude towards consumption in the aftermath of the Covid epidemic, as well as increased competition from other companies joining the education electronics industry.

Digging Deeper: Founded in 1999, Readboy is engaged in the design, manufacture and marketing of various smart learning devices. Its initial core product was rudimentary reading machines, which later developed into the production of personal student tablets, smart classroom solutions, wearable products and smart accessories. The company has applied for listing three times and was finally debuted on the Hong Kong Stock Exchange in July last year, raising HK$365 million ($46.8 million). Its financial performance was deeply affected by the Covid epidemic, with its revenue plummeting 25.6% to 605 million yuan and adjusted profit dropping an even bigger 91.8% to 6.33 million yuan.

Market Reaction: Readboy’s shares dropped Monday morning and were down 0.6% to $7.91 by the midday break, 4% higher than its listing price of HK$7.60 a year ago.

Translation by A. Au

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