Net Profit Growth: 19% – LHN Limited Financial Analysis Report for FY2024

Business Description

LHN Limited is an investment holding company incorporated in Singapore, with its core operations in space optimisation, property development, facilities management services, and energy business. The company has a geographic footprint across Singapore, Hong Kong, Myanmar, Indonesia, and Cambodia. The company recently exited the logistics services sector after disposing of its entire shareholding in LHN Logistics Limited in August 2023 [[10]].

Industry Position and Competitors

The Space Optimisation Business is a significant growth driver for LHN Limited, leveraging Singapore’s strong demand for co-living spaces. The company is well-positioned within the industry with a strategic focus on expanding its co-living portfolio, which has been instrumental in capturing market demand [[25]]. The company also operates in the industrial property sector and facilities management, which have shown resilience and growth. Competition arises from other real estate and facilities management companies in the region.

Revenue Streams and Customer Base

The company generates revenue through industrial, commercial, and residential properties, facilities management, and energy solutions. The residential co-living segment in Singapore has shown significant growth, contributing to the overall revenue increase. LHN’s customer base includes industrial clients for its energy business and individuals seeking co-living spaces [[25]].

Financial Statement Analysis

Income Statement

The company’s revenue increased by 29.2% to S\$121.0 million in FY2024, driven by the Space Optimisation Business and Facilities Management Business. Gross profit also increased by S\$10.3 million, reflecting higher profitability in the co-living segment [[27]]. Net profit grew by 19.0% to S\$47.9 million [[29]].

Balance Sheet

Non-current assets rose by S\$153.8 million, mainly due to investments in properties and joint ventures. Current liabilities remained stable, with a slight decrease in trade and other payables [[30]].

Cash Flow Statement

The company generated S\$28.4 million in net cash from operating activities, driven by positive operating profits. However, net cash used in investing activities was substantial at S\$99.8 million due to property acquisitions [[31]].

Dividend Information

The company declared a final dividend of 1.0 Singapore cent and a special dividend of 1.0 Singapore cent per share, payable in cash or scrip [[36]].

Key Findings

Strengths

• Strong revenue growth driven by co-living spaces in Singapore.
• Strategic investments in high-demand areas like co-living and energy solutions.
• Stable financial position with a clear capital recycling strategy.

Risks

• Exposure to currency fluctuations due to international operations.
• High capital expenditure impacting cash flow due to property investments.

Special Activities

The company is expanding its co-living portfolio and has made strategic acquisitions to support growth in this segment [[26]].

Recommendations

For Current Investors

Hold the stock considering the company’s strong growth in core segments and dividend payout.

For Potential Investors

Consider buying the stock due to strong growth prospects and strategic investments, but be mindful of the high capital expenditure and currency risks.

Disclaimer: This analysis is based on the financial report and is not financial advice. Investors should conduct their own research or consult a financial advisor before making investment decisions.

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