#Hong Kong #revenue growth #SU Group Holdings #Securities Engineering

SU Group Holdings Reports Significant Revenue Growth in FY2025

SU Group Holdings Limited (Nasdaq: SUGP), an integrated security and engineering services company based in Hong Kong, has announced its financial results for the fiscal year ending September 30, 2025. The company experienced a notable revenue growth of 5.6% year-over-year, generating HK$192.4 million (approximately US$24.7 million), compared to HK$182.2 million for the previous year. This growth is primarily attributed to heightened demand for security-related engineering services, a sector the company has strategically focused on.

Chairman’s Perspective

Dave Chan, the Chairman and CEO of SU Group, expressed optimism about the year’s achievements. He stated that fiscal 2025 marked a year of meaningful progress, highlighted by solid top-line growth driven by the demand for security engineering services. Chan acknowledged the company's strategic investments in talent, technology, and market penetration as vital for attaining long-term growth and maintaining a competitive edge. Despite facing margin pressure due to increased labor and subcontracting costs, Chan believes that these investments have fortified the company's foundation for future scaling and leadership in the industry.

Financial Overview

The Chief Financial Officer, Calvin Kong, shed light on the financial results, noting that the company’s revenue increase comes in a challenging cost environment characterized by rising statutory wages and employee benefits. Although the company's gross margin faced downward pressure, SU Group maintained a strong working capital position, concluding the year with solid liquidity and continued investment in its operational capabilities. Despite the financial challenges, the company remains committed to disciplined cost management and improving cash flows, aiming to leverage its capital structure for enhanced shareholder value.

Breakdown of Operations

In fiscal 2025, the increase in revenue was predominantly driven by:

• - Security-related engineering services, which contributed an additional HK$4.9 million to revenues.
• - Security guarding and associated vocational training services, which saw a rise of HK$5.3 million.

The company’s commitment to comprehensive security solutions and a robust expansion strategy, which includes enhancing its security guarding and screening operations, remains essential as it aims to respond effectively to client needs.

Challenges and Margin Repercussions

Despite the revenue increase, SU Group faced considerable challenges, with the cost of revenues increasing by HK$27.1 million or 20.1%, leading to diminished gross profits. The gross profit margin plummeted to 16%, down from 26.1% the previous year. This decrease can be attributed largely to the higher utilization of subcontractor services for completed projects and escalating labor costs in light of regulatory wage increases. Kong underscored the necessity for operational adaptations in response to these factors as the company moves forward.

Looking Ahead

The outlook for SU Group appears optimistic. With a robust framework and plans for continued investment, the executive team is confident in navigating the evolving market landscape. SU Group aims to capitalize on its AI tools for security solutions and further expand its operational footprint, positioning itself strongly in both local and regional markets.

In summary, while SU Group Holdings faced several challenges in fiscal 2025, the company successfully achieved revenue growth through strategic offerings and investments in enhanced security solutions. The leadership's commitment to adapting and investing in the future proves that SU Group is poised for potential long-term success in the security services industry in Hong Kong and beyond.