Datapulse Technology Limited Annual Report 2024: Net Profit Growth Analysis

Business Description

Datapulse Technology Limited is primarily engaged in investment holding and investment trading. The company operates in several business segments:

• Investment Holding: Long-term investments.
• Investments: Trading in short-term investments.
• Asset Management: Providing asset management services for hospitality assets.
• Hotel Operations: Running hotel operations, including Travelodge Myeongdong City Hall in Seoul, South Korea.

The company has a geographically diverse operation, with significant activities in Singapore and Seoul, South Korea.

Industry Position and Market Share

Datapulse Technology Limited operates within the hospitality and investment sectors. The company has managed to position itself effectively despite various industry challenges, leveraging its asset management expertise and strategic investment choices.

Revenue Streams and Competitive Advantage

The company’s revenue primarily comes from its hotel operations, followed by investment income and asset management fees. The customer base is diverse, including guests at its hotel properties and investors in its securities. The company’s competitive advantage lies in its robust financial management and strategic asset allocation, leading to minimal borrowings and substantial cash reserves.

Financial Statement Analysis

Income Statement

For the financial year ended 31 July 2024, Datapulse Technology Limited reported a revenue of \$6.2 million, up from \$4.5 million in the previous year. The company’s net profit attributable to owners increased significantly to \$4.5 million from a loss of \$1.2 million in FY2023. This turnaround is attributed to improved hotel revenue and a favorable valuation of their freehold property [[4]], [[6]].

Balance Sheet

As of 31 July 2024, the company has total assets of \$63.8 million and total liabilities of \$1.9 million. The total equity stands at \$61.9 million, reflecting a healthy financial position with minimal debt and substantial net assets [[6]].

Cash Flow Statement

The company generated a net cash flow from operating activities of \$1.4 million and from investing activities of \$0.4 million. Financing activities resulted in a net outflow of \$0.9 million primarily due to loan repayments and share buybacks. Overall, cash and bank balances increased from \$13.4 million to \$14.2 million as at 31 July 2024 [[5]], [[78]].

Key Financial Highlights

• Net Profit Growth: \$4.5 million profit in FY2024 from a loss of \$1.2 million in FY2023 [[72]].
• Revenue: Increased to \$6.2 million from \$4.5 million [[6]].
• Cash Reserves: Increased to \$14.2 million from \$13.4 million [[5]].
• Dividend: No dividend proposed for FY2024 [[3]], [[55]].

Special Activities or Actions

The company has taken several actions to improve profitability, including:

• Reversal of impairment losses on freehold property due to favorable valuations [[4]].
• Reducing investments in debt and equity securities to manage market volatility [[12]].

Investment Recommendations

If Currently Holding the Stock

Given the company’s strong financial turnaround, substantial cash reserves, and effective management strategies, it is recommended to hold the stock. The company’s improved profitability and financial health indicate potential for future growth.

If Not Currently Holding the Stock

For new investors, Datapulse Technology Limited presents a compelling opportunity due to its robust financial performance and strategic initiatives to manage market risks and improve profitability. Consider initiating a position in the stock, it is recommended to maintain the position, given the company’s significant recovery from previous losses and the robust financial position.

Disclaimer

The recommendations provided in this analysis are based on the financial information available in the Datapulse Technology Limited Annual Report for FY2024. Investors should conduct their own research and consider their financial situation and goals before making any investment decisions.