Santech Holdings Announces Unaudited Financial Results for the First Half of Fiscal Year 2025

Rhea-AI Summary

Santech Holdings (NASDAQ: STEC) reported its unaudited financial results for H1 FY2025. The company has undergone significant restructuring, completely exiting its overseas wealth management and asset management businesses in August 2024. Total revenues from continuing operations dropped to nil from US$17.4 million in the same period last year.

Under discontinued operations, total revenues decreased by 72.1% to US$1.2 million for the two months ended August 31, 2024. The company disposed of several Hong Kong subsidiaries, with asset management businesses sold for US$0.6 million and wealth management units for nil consideration. General and administrative expenses from continuing operations decreased by 4.3% to US$2.4 million.

Positive

• Successful completion of business restructuring and exit from non-core operations
• Reduction in general and administrative expenses by 4.3% to US$2.4 million
• Small gain of US$138,000 realized from disposal of subsidiaries
• Positive income of US$421,000 from discontinued operations in final period

Negative

• Revenue from continuing operations dropped to zero from US$17.4 million year-over-year
• Total revenues from discontinued operations decreased 72.1% to US$1.2 million
• Company currently has no apparent revenue-generating operations
• Wealth management business units were sold for nil consideration

Insights

Financial Restructuring Analyst

Santech has completely exited wealth/asset management businesses, leaving zero revenue and unclear future direction while reducing expenses.

Santech's latest financials reveal a complete operational transformation as the company has entirely exited its overseas wealth management and asset management businesses by August 2024. This strategic shift has resulted in zero revenue from continuing operations for H1 FY2025, down from $17.4 million in the same period last year.

The most concerning aspect is the complete absence of replacement revenue streams. While the company describes itself as "focusing on exploring opportunities in consumer technology, consumer healthcare and enterprise technology," there's no evidence of any revenue generation from these new focus areas. This suggests Santech is effectively a shell company with no operational business at present.

On the positive side, the company has reduced its general and administrative expenses from continuing operations by 4.3% to $2.4 million, reflecting ongoing cost-cutting efforts. However, with zero revenue, these expenses represent a complete cash burn with no offsetting income.

The disposal of their Hong Kong subsidiaries yielded minimal financial benefit – the asset management business entities were sold for just $0.6 million, while the wealth management businesses were divested for no consideration, resulting in a net gain of only $138,000 from these disposals.

The company's discontinued operations showed some profitability in their final two months ($421,000 net income), but this was primarily due to the gain on disposal rather than operational success. With no clearly articulated business model to replace the discontinued operations, Santech faces significant uncertainty about its future revenue generation capabilities.

HONG KONG, June 25, 2025 (GLOBE NEWSWIRE) -- Santech Holdings Ltd. (“Santech” or the “Company”) (NASDAQ: STEC) today announced its unaudited financial results for the first half of fiscal year 2025 ended December 31, 2024.

Santech is a Cayman Islands holding company operating through its subsidiaries in Hong Kong and United States, primarily focusing on exploring opportunities in consumer technology, consumer healthcare and enterprise technology.

First Half of Fiscal Year 2025 Highlights

Continuing Operations

Net revenues

Total revenues from continuing operations in the six months ended December 31, 2024 decreased to nil from US$17.4 million in the same period of 2023, primarily due to Company having completely exited from overseas wealth management and asset management businesses during the reporting period. All remaining revenues from our prior overseas wealth management and asset management businesses during the reporting period have been reclassified under discontinued operations.

Operating Costs and Expenses

Cost of compensation and benefits from continuing operations in the six months ended December 31, 2024 decreased to nil from US$13.2 million in the same period of 2023.

Sales and marketing expenses from continuing operations decreased to nil from US$1.5 million in the same period of 2023.

All direct costs of revenue from overseas wealth management and asset management during the reporting period have been reclassified under discontinued operations.

General and administrative expenses from continuing operations in the six months ended December 31, 2024 decreased by 4.3% to US$2.4 million from US$2.5 million in the same period of 2023, primarily due to ongoing cost cutting and restructuring.

Other expenses, net from continuing operations in the six months ended December 31, 2024 were US$0.2 million, primarily due to the losses on early termination of operating lease.

Discontinued Operations

Results of discontinued operations are as follows:

	Six Months Ended December 31, 2023			Two Months Ended August 31, 2024
	(US$’000)			(US$’000)
Discontinued operations
Net revenues
Wealth management	2,442			11
Asset management	1,788			1,170
Total net revenues	4,230			1,181
Operating cost and expenses
Compensation and benefits	1,358			602
Sales and marketing expenses	315			-
General and administrative expenses	656			266
Asset impairment loss	2,158			-
Total operating cost and expenses	4,487			868
(Loss)/income from operations	(257	)		313
Other expense, net	(4	)		(1	)
Income/(loss) before income tax expense	(261	)		312
Income tax (expense)/credit	(145	)		(29	)
Net income/(loss) from discontinued operations	(406	)		283
Gain on disposal of subsidiaries from discontinued operations, net	-			138
(Loss)/income for the year from discontinued operations, net of income taxes	(406	)		421

In August 2024, the Company completely exited from its historical businesses in overseas wealth management and asset management and disposed of certain subsidiaries in Hong Kong, namely, Haiyin Insurance (Hong Kong) Co., Limited and Hywin International Insurance Broker Limited for nil consideration, and Haiyin International Asset Management Limited and Hywin Asset Management (Hong Kong) Limited for US$0.6 million to a third party. The disposal was completed on August 31, 2024. After the disposals, the Company no longer holds any financial services licenses or houses any personnel licensed to provide financial services in Hong Kong.

Net revenues

Total revenues from discontinued operations in the two months ended August 31, 2024 decreased by 72.1% to US$1.2 million from US$4.2 million in the six months ended December 31, 2023, primarily due to cessation of operations in wealth management and asset management.

Operating Costs and Expenses

Cost of compensation and benefits from discontinued operations in the two months ended August 31, 2024 decreased by 55.7% to US$0.6 million from US$1.4 million, in line with the decreases in transaction value of wealth management and asset management businesses.

Sales and marketing expenses decreased to nil from US$0.3 million in the six months ended December 31, 2023, due to discontinuation of sales and marketing activities.

General and administrative expenses from discontinued operations in the two months ended August 31, 2024 decreased by 59.5% to US$0.3 million from US$0.7 million in the six months ended December 31, 2023.

Asset impairment loss from discontinued operations in the six months ended December 31, 2023 represented impairment losses due to impairment of assets held in the PRC, and impairment of intangible assets including software and licenses due to disruption to our brand and our licensed financial services operations in Hong Kong.

Loss from disposal of subsidiaries under discontinued operations

	Wealth management business			Asset management business			Total
	(US$’000)			(US$’000)			(US$’000)
Considerations received	-			641			641
Less: Net assets disposed of	(134	)		(369	)		(503	)
(Loss)/gain from disposal of subsidiaries	(134	)		272			138

About Santech Holdings Limited
Santech Holdings Limited (NASDAQ: STEC) is a technology-focused company. The Company historically served a large number of high net-worth clients in China and Hong Kong in wealth management, asset management and health management, and accumulated a large customer base. The Company has since exited or disposed of its historical businesses in financial services, and is actively exploring innovative new opportunities in technology verticals, including and not limited to consumer technologies and enterprise technologies. For more information, please visit https://ir.santechholdings.com.

Safe Harbor Statement
This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipate,” “estimate,” “forecast,” “plan,” “project,” “potential,” “continue,” “ongoing,” “expect,” “aim,” “believe,” “intend,” “may,” “should,” “will,” “is/are likely to,” “could” and similar statements. Statements that are not historical facts, including statements about the Company’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Contact:
Santech Holdings Limited
Email: ir@santechholdings.com

SANTECH HOLDINGS LTD. CONSOLIDATED BALANCE SHEETS (In thousands, except for number of shares and per share data)
	June 30, 2024			December 31, 2024
	(US$’000)			(US$’000)
Assets
Current assets:
Cash and cash equivalents	15,184			11,233
Deposits, prepayments and other current assets	320			72
Total current assets	15,504			11,305
Property and equipment, net	3			4
Right-of-use asset	1,235			-
Total non-current assets	1,238			4
Total Assets	16,742			11,309
Liabilities and Shareholders’ equity
Current liabilities:
Commission payable	859			-
Income tax payable	91			-
Due to related parties	11,488			11,062
Other payables and accrued liabilities	433			7
Lease liability	1,059			-
Total current liabilities	13,930			11,069
Lease liability	250			-
Total non-current liabilities	250			-
Total Liabilities	14,180			11,069
Shareholders’ Equity:
Ordinary shares (US$0.0001 par value; authorized 500,000,000 shares; issued and outstanding 56,000,000* shares (28,000,000 ADS) as of June 30, 2024, and December 31, 2024, respectively)	6			6
Additional paid-in capital	33,256			33,256
Accumulated deficit	(30,700	)		(33,022	)
Total shareholders’ equity	2,562			240
Total Liabilities and shareholders’ equity	16,742			11,309

SANTECH HOLDINGS LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In thousands, except for share and per share data, or otherwise stated)
	Six Months Ended December 31,
	2023			2024
	(US$’000)			(US$’000)
Continuing operations
Net revenues
Insurance referral	17,351			-
Total net revenues	17,351			-
Operating cost and expenses
Compensation and benefits	13,210			-
Share-based compensation expense	102			-
Sales and marketing expenses	1,512			-
General and administrative expenses	2,469			2,364
Total operating cost and expenses	17,293			2,364
Income/(loss) from operations	58			(2,364		)
Other income/(expenses)
Interest expense, net	(63	)		(17		)
Other income/(expense), net	72			(245		)
Total other income/(expense), net	9			(262		)
Income/(loss) before income tax expense	67			(2,626		)
Income tax (expense)/credit	-			(117		)
Net income/(loss) from continuing operations	67			(2,743		)
Discontinued operations
(Loss)/income for the year from discontinued operations, net of income taxes	(406	)		421
Net loss and comprehensive loss for the period	(339	)		(2,322		)
(Loss)/income per share
From continuing and discontinued operations
Ordinary share - Basic	(0.01	)		(0.04		)
Ordinary share - Diluted	(0.01	)		(0.04		)
ADS - Basic	(0.01	)		(0.08		)
ADS - Diluted	(0.01	)		(0.08		)
From continuing operations
Ordinary share - Basic	0.00			(0.05		)
Ordinary share - Diluted	0.00			(0.05		)
ADS - Basic	0.00			(0.10		)
ADS - Diluted	0.00			(0.10		)
From continuing and discontinued operations
Ordinary share - Basic	(0.01	)		0.01
Ordinary share - Diluted	(0.01	)		0.01
ADS - Basic	(0.01	)		0.02
ADS - Diluted	(0.01	)		0.02
Weighted average number outstanding:
Ordinary share - Basic	56,000,000			56,000,000
Ordinary share - Diluted	56,000,000			56,000,000
ADS - Basic	28,000,000			28,000,000
ADS - Diluted	28,000,000			28,000,000

SANTECH HOLDINGS LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except for share and per share data, or otherwise stated)
	Ordinary shares						Additional paid-in capital			Accumulated deficit			Total Shareholders’ equity
	Number of ordinary shares			Amount
				(US$’000)			(US$’000)			(US$’000)			(US$’000)
Balance as of June 30, 2024	56,000,000			6			33,256			(30,700	)		2,562
Net loss for the period	-			-			-			(2,322	)		(2,322	)
Balance as of December 31, 2024	56,000,000			6			33,256			(33,022	)		240

FAQ

What were Santech Holdings (STEC) key financial results for H1 FY2025?

Santech reported zero revenue from continuing operations, down from US$17.4 million in the previous year. Discontinued operations generated US$1.2 million in revenue, down 72.1% from the previous period.

Why did Santech Holdings (STEC) revenue drop to zero in H1 FY2025?

The revenue dropped to zero because Santech completely exited its overseas wealth management and asset management businesses in August 2024, with all remaining revenue reclassified under discontinued operations.

How much did Santech Holdings (STEC) receive from selling its subsidiaries?

Santech received US$0.6 million for selling its asset management subsidiaries, while the wealth management subsidiaries were sold for nil consideration, resulting in a total net gain of US$138,000 from the disposals.

What is Santech Holdings' (STEC) current business focus after selling its subsidiaries?

After exiting financial services, Santech states it is focusing on exploring opportunities in consumer technology, consumer healthcare, and enterprise technology sectors.

How did Santech Holdings (STEC) perform in terms of expenses for H1 FY2025?

General and administrative expenses from continuing operations decreased by 4.3% to US$2.4 million, while compensation, benefits, and marketing expenses dropped to zero due to business restructuring.