VSTECS (or the "Company") released their first ever business update for the first quarter of 2025, announcing YoY growth rates of revenue, gross margin, and net profit. The release of quarterly financial data in a voluntary update willingness to providing transparency in its operations, and reflects its commitment to shareholders and investors alike. VSTECS is a company with strong fundamentals, boasting over 20 years of continued growth and strong cash flows and more detailed and timely information releases will decrease perceived risk with regard to the Company and improve its valuation. The first quarter financial results are also consistent with management guidance of 15-20% revenue growth rate for the next three years primarily in its higher margin business segments.
　　In 1Q2025, unaudited total revenue increased by 16-17% YoY, gross profit increased by 20-21% YoY, net profit attributable to shareholders increased by 28-29%, mostly in line with our 1H2025 predictions. Previously, we forecast the Company revenue in 1H2025 to increase to HK$46.5 bn, representing a YoY increase of 16.0%. We forecast gross profit of HK$2,065 mn, representing a YoY increase of 16.3%. We forecast a net profit of HK$627 mn, representing a YoY increase of 30.3%. Our 1H2025 revenue growth rate and net profit growth rate were mostly in line with 1Q2025 results, with gross profit results beating forecasts. Given that we base our gross profit on historical gross margin. This beat in gross profit was likely due to an increase in gross margin due to discontinuation of low margin southeast Asian region business.
　　Catalyst: financial performance in 1H2025 exceeding market expectations.
　　Risks: 1) industry competition may exceed expectations; 2) disruption of customer consumer electronic business by new business models.