Biolidics Limited Financial Analysis: Net Profit Decline of 20.7%

Business Description

Biolidics Limited is a Singapore-based company primarily engaged in the development, marketing, sale, and distribution of biomedical technology, life, and medical science-related products and services. The company operates in several business segments including cancer, infectious diseases, and laboratory services. Notably, Biomedics Laboratory Pte Ltd, a subsidiary providing laboratory services, has been placed under creditors’ voluntary liquidation as of 10 June 2024. The geographical footprint is predominantly in Singapore, with non-current assets located there as well.

Industry Position and Competitors

Within the biomedical technology sector, Biolidics faces competition from both domestic and international firms specializing in cancer diagnostics and laboratory services. The company’s market share is not explicitly stated, but the financial challenges suggest a competitive and possibly saturated market environment.

Revenue Streams and Customer Base

Biolidics generates revenue primarily from the sale of biomedical devices and consumables, including the ClearCell FX1 system and CTChip FR1 biochip. Revenue streams also include extended warranty services. However, there has been a significant drop in revenue from laboratory services due to the liquidation of Biomedics Laboratory Pte Ltd. The customer base spans across regions including Singapore, Japan, Europe, and Hong Kong.

Financial Statement Analysis

Income Statement

For the nine months ending 30 September 2024, Biolidics reported a revenue of S\$73,000, a 61.1% decrease from S\$190,000 in the same period in 2023. The company incurred a net loss of S\$1.87 million, a 20.7% increase from the previous year’s loss of S\$1.55 million. Notably, there was a significant reduction in purchases and a marked increase in professional fees.

Balance Sheet

As of 30 September 2024, Biolidics had total assets of S\$504,000 and total liabilities of S\$3.31 million, resulting in net liabilities of S\$2.81 million. The company’s current liabilities significantly increased due to a substantial loan from a shareholder, indicating liquidity challenges.

Cash Flow Statement

The company reported an operating cash outflow of S\$1.54 million for the nine months ending 30 September 2024. There were no significant cash flows from investing activities. Financing activities generated net cash inflows of S\$1.46 million, primarily from a shareholder loan and share issuance.

Dividends and Earnings

No dividend was declared for the current period. The company experienced a decline in net profit, with a 20.7% increase in net loss year-over-year.

Key Findings and Risks

Strengths:

• Diversification into new business areas such as Multi-Channel Networking, E-Sports, and Live-streaming.
• New share subscriptions providing short-term liquidity.

Risks:

• Significant net losses and liquidity challenges.
• Dependence on shareholder loans for working capital.
• Increased professional fees impacting profitability.

Special Activities and Actions

The company is diversifying its business into Multi-Channel Networking, E-Sports, and Live-streaming, aiming to reduce reliance on its existing biomedical segments. The proposed acquisition of Shenzhen Xiaozhao Network Technology Co., Ltd is part of this strategy.

Investor Recommendations

If currently holding this stock: Given the company’s financial challenges and ongoing diversification efforts, it is advisable to hold the stock and monitor the outcomes of the new business ventures and any further financial restructuring.

If not currently holding this stock: Potential investors should consider the high risks associated with the company’s current financial position. It may be prudent to wait for clearer signs of financial stability and successful diversification before investing.

Disclaimer

This analysis is based on the unaudited financial statements for the period ending 30 September 2024. Investors are encouraged to perform their own due diligence and consider their financial situation before making any investment decisions.