Core Viewpoint - Raytech Holding Limited reported a significant revenue increase of 31.0% for the six months ended September 30, 2024, driven by strong sales in its trimmer series, although operating expenses rose sharply, leading to a decrease in income from operations and net income [2][5][10]. Financial Performance - Revenue reached HKD 43.2 million (US$ 5.6 million), up from HKD 33.0 million in the prior year [2][4]. - Total operating expenses increased by 50.9% to HKD 39.3 million from HKD 26.1 million [3][5]. - Income from operations decreased by 43.7% to HKD 3.9 million (US$ 0.5 million) compared to HKD 7.0 million in the previous year [3][9]. - Net income fell by 27.5% to HKD 4.7 million (US$ 0.6 million) from HKD 6.4 million [3][10]. Revenue Breakdown - The revenue increase was primarily attributed to the trimmer series, which saw sales rise to HKD 20.9 million from HKD 4.5 million in the previous year [6][4]. - Other product sales included hair styling series at HKD 19.1 million, eyelash curlers at HKD 0.2 million, nail care series at HKD 0.9 million, and other personal care appliances at HKD 1.0 million [6]. Operating Expenses - Merchandise costs surged by 40.3% to HKD 34.1 million (US$ 4.4 million) from HKD 24.3 million [7]. - Selling, general, and administrative expenses rose to HKD 5.2 million (US$ 0.7 million) from HKD 1.8 million, mainly due to increased salaries and costs related to the IPO [8]. Profitability Metrics - The overall gross profit margin decreased by 5.2% to 21.2% from 26.4% in the previous year, influenced by lower margin profiles from new customers and reduced sales of tooling [9]. - Income from operations as a percentage of revenue dropped to 9.1% from 21.1% [3]. Future Outlook - The company aims to optimize its cost structure while continuing to drive sales growth, focusing on enhancing product offerings and expanding its customer base to improve profitability [2].

Company Overview - The company qualifies as an "emerging growth company" with less than US$1.235 billion in revenue for the last fiscal year, allowing for reduced reporting requirements [250]. - The company has over 10 years of experience in the personal care electrical appliance industry, focusing on sourcing and wholesaling for international brand owners [257]. - The management team has over 30 years of research, development, and operational experience, driving business growth through R&D efforts [308]. - The company has a strong presence in the personal care electrical appliances industry with a 10-year operating history, focusing on hair styling products [307]. Revenue Breakdown - Revenue from hair styling series constituted 48% of total revenue for the year ended March 31, 2024, with hair dryers accounting for approximately 37% of that segment [259]. - Sales of trimmer series represented 34% of total revenue for the year ended March 31, 2024, with new products like men's shaver and women's epilator contributing 11% and 13% respectively [264]. - The company generated 74.1% of total revenue from Koizumi Seiki Corp. for the year ended March 31, 2024, while expanding into markets in the U.S., U.K., Germany, Australia, and New Zealand [272]. - For the year ended March 31, 2024, two major customers accounted for 74.1% and 16.5% of the total revenues respectively [500]. Market Trends - The global personal care electrical appliances market size expanded to US$22.75 billion in 2024 from US$21.27 billion in 2023, representing a compound annual growth rate (CAGR) of 7% [286]. - The overall total sales value of personal care electrical appliances in Japan increased by 10.8% in 2023, from Japanese Yen 277.6 billion in 2022 to Japanese Yen 307.6 billion in 2023 [290]. - The total sales value of personal care electrical appliances in the U.S. increased by 10.8% in 2023, from US$6.57 billion in 2022 to US$6.81 billion in 2023 [296]. - The global personal care electrical appliances market is projected to reach US$35.9 billion by 2032, with a CAGR of 5% during 2024-2032 [300]. - The personal care appliances market size is expected to grow to US$29.68 billion by 2028, with a CAGR of 6.9% [301]. Distribution and Sales Channels - The e-commerce channel segment is expected to record the highest CAGR of 7.4% among various distribution channels during 2022 through 2031 [302]. - The rise in disposable incomes and expansion of the organized retail sector are key market drivers [305]. Product Development and Future Plans - The company plans to explore oral care electrical appliance series for international brand owners, leveraging its design and development capabilities [268]. - The company plans to explore new product lines, including oral care electrical appliances, and expand men's personal care and hair care product lines [314]. - The company aims to expand its market presence from Hong Kong to the U.S., Europe, and other Asian markets, although marketing initiatives have not yet started in these regions [315]. Financial Information - Payments to Zhongshan Raytech accounted for 88.5% of total manufacturing costs for the year ended March 31, 2024 [277]. - As of March 31, 2024, the cash balance was HKD 35,885,666 (approximately US$ 4,585,500) held at reputable financial institutions in Hong Kong [494]. - For the year ended March 31, 2022, net cash used in financing activities was HKD 1,558,000 due to dividend payments [495]. - The company did not incur any capital expenditures for the years ended March 31, 2022, 2023, and 2024 [496]. Customer and Supplier Relationships - As of March 31, 2022 and 2023, one major customer accounted for 96.8% and 99.6% of the total accounts receivable respectively [499]. - As of March 31, 2024, one manufacturer accounted for 97.1% of the total balance of accounts payable [501]. - For the year ended March 31, 2024, one manufacturer accounted for 88.5% of total purchases [502]. - The company has implemented a stringent quality control system to ensure high-quality products that meet international safety standards [311]. Risk Factors - The company is exposed to foreign currency risk primarily through sales denominated in currencies other than the functional currency, mainly US$ [504]. - The company is not exposed to significant interest rate risk as the interest rates are not expected to change significantly [503]. - The increasing amount of plastic waste due to disposal of electrical appliances acts as a restraint in the development of these products [306]. Employee and Operational Information - As of March 31, 2024, the company has 6 employees and maintains good relations with them [324]. - The principal executive office is a leased property of 1,343 square feet with a monthly rent of HKD25,000 (approximately US$3,194) [326]. - The operating lease expenses amounted to HKD300,000 (approximately US$38,334) for the years ended March 31, 2024, and 2023 [326]. - The research and development team consists of 2 full-time employees with a combined experience of at least 16 years in electrical appliances engineering and supply chain management [268]. Intellectual Property - The company does not own any trademarks or patents for its products, as these are owned by its customers [321].