Financial Analysis of Yoma Strategic Holdings Ltd. – Net Profit Decline of US\$11.04 million

Business Description

Yoma Strategic Holdings Ltd. is a Singapore-based investment holding company with core operations in Myanmar. The company operates in several business segments including:

• Property development and sales of land development rights
• Leasing of investment properties
• Supplying and selling agriculture and construction equipment, passenger and commercial vehicles
• Leasing non-bank financing products
• Mobile financial services
• Operating restaurants
• Investments in logistics, infrastructure, tourism, solar power, agriculture, IT, and other sectors

Geographically, the company operates primarily in Myanmar, with investment activities extending to Singapore and the PRC.

Industry Position and Competitors

Yoma Strategic Holdings Ltd. is a diversified player within the Myanmar market. The company faces competition from both local and international firms in real estate, automotive, financial services, and food and beverage sectors. Its market share in each segment varies, with significant activities in real estate development and mobile financial services.

Revenue Streams and Customer Base

The company generates revenue from multiple sources:

• Real estate development and sales
• Leasing of investment properties
• Sales and services of motor vehicles and equipment
• Leasing and rental of vehicles and equipment
• Mobile financial services
• Food and beverage operations
• Investment returns

The diverse customer base includes property buyers, vehicle and equipment buyers, leasing clients, mobile financial service users, and restaurant patrons.

Financial Statement Analysis

Income Statement

For the six months ended 30 September 2024, the company reported a decrease in total revenue to US\$95.21 million from US\$111.60 million in the same period in 2023, primarily due to the depreciation of the Myanmar Kyat (MMK). The net loss attributable to equity holders was US\$11.04 million, a significant decline from the net loss of US\$2.50 million in the prior year.

Balance Sheet

Total assets decreased to US\$1,102.84 million as of 30 September 2024 from US\$1,157.42 million as of 31 March 2024. This decrease was mainly due to lower cash and bank balances and the sale of investment properties. The company’s net asset position was impacted by the depreciation of MMK against USD.

Cash Flow Statement

The company experienced a net cash outflow of US\$27.31 million in 6M-Sept2024 compared to a net cash inflow of US\$7.34 million in 6M-Sept2023. This was mainly due to working capital payments, increased capital expenditures, and investments in core infrastructure and digital transformation projects.

Dividend Information

No dividend was declared for the six-month period ended 30 September 2024, as the company focuses on ongoing projects and deleveraging activities.

Key Findings

Strengths

• Diverse revenue streams across multiple sectors
• Strong presence in the Myanmar real estate market
• Expansion in digital financial services

Risks

• Significant impact from currency fluctuations
• Economic headwinds and operating challenges in Myanmar
• Net loss and decreased revenue in key segments

Special Activities

The company is taking steps to improve profitability by focusing on the construction and delivery of sold real estate units, expanding digital financial services, and planning regional expansion for its food and beverage brands.

Recommendations

For Current Shareholders: Given the current economic challenges and net loss, it is advisable to hold the stock and monitor the company’s progress in its strategic initiatives and market recovery.

For Potential Investors: Considering the company’s diverse operations and strategic focus, potential investors may consider a cautious approach, waiting for signs of stabilization in Myanmar’s economy and the company’s financial performance before investing.

Disclaimer

The above recommendations are based on the financial report provided and are for informational purposes only. Investors are advised to conduct their own research and consult with financial advisors before making any investment decisions.