Miyoshi Limited Financial Analysis: Net Profit Decline and Investment Recommendations

Business Description

Miyoshi Limited, incorporated in Singapore, is engaged in the design and manufacturing of moulds and precision pressed parts, as well as commodities trading. Its business segments include Data Storage, Consumer Electronics, Automotive, and Other rental income from investment properties. The company’s operations span several countries, including the Philippines, China, Thailand, Malaysia, and Singapore [[9]].

Industry Position and Market Share

Miyoshi Limited operates in the precision engineering sector. While specific competitors and market share details are not provided in the report, the company is affected by the general economic conditions and industry-specific trends such as demand fluctuations in consumer electronics and automotive sectors [[11]].

Revenue Streams and Customer Base

The company generates revenue from the sale of goods in consumer electronics, automotive, and data storage segments. Geographic revenue is primarily sourced from the Philippines and China. The company has discontinued its commodities trading business in Singapore, impacting revenue from the ‘Others’ segment [[14]].

Financial Statement Analysis

Income Statement

For FY2024, Miyoshi Limited reported a net loss after income tax of \$2.53 million, a decline from a net loss of \$1.73 million in FY2023. Revenue decreased by 9.62% to \$39.56 million, primarily due to weaker demand in the automotive segment and the discontinuation of commodities trading [[23]].

Balance Sheet

Total assets decreased to \$48.03 million as of 31 August 2024, down from \$51.40 million in 2023. This decline is attributed to depreciation and reclassification of assets held for sale. Liabilities also decreased, primarily due to reduced bank borrowings [[4]].

Cash Flow Statement

Net cash generated from operating activities was \$1.55 million, with significant cash used in financing activities due to repayment of bank borrowings. Cash and bank balances decreased slightly to \$3.91 million [[8]].

Dividend Information

No dividend has been declared for FY2024 as the company adopts a prudent approach to conserve cash amidst a challenging business environment [[26]].

Strategic Actions

The company has proposed the disposal of one of its investment properties in Malaysia to improve its financial position. This is expected to complete in the first half of FY2025 [[25]].

Key Findings and Recommendations

Strengths

• Diversified revenue streams across multiple geographical regions.
• Prudent financial management with reduced liabilities.

Risks

• Decreasing revenue and net losses highlight operational challenges.
• High exposure to economic and industry-specific fluctuations.

Investment Recommendations

For current investors, it is advisable to hold the stock and monitor the outcome of the proposed property disposal and any improvement in operational performance. New investors may consider a cautious approach due to the current financial challenges and external economic factors.

Disclaimer

This analysis is based on the financial report for the year ended 31 August 2024. Investors should conduct their own research and consider their financial situation before making any investment decisions.

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