Sen Yue Holdings Limited Financial Report Analysis – Net Profit Decline

Business Description

Sen Yue Holdings Limited, incorporated in Singapore, operates primarily in the manufacturing and trading sectors. The company is organized into three main business segments: Metal Components, Electro Deposition Coating (ED Coating), and Commodities. The Metal Components segment involves manufacturing and sales of perforated materials, speaker nets, and other metal components. The ED Coating segment provides coating services and secondary processes. The Commodities segment trades black mass powder and materials like copper and aluminum. Geographically, the company operates in Singapore, Malaysia, China, and other regions.

Industry Position and Competitors

Within the industry, Sen Yue Holdings faces significant competition, particularly in the Commodities segment, which has seen a substantial decline due to market conditions. The company holds a modest market share and competes with other firms that have similar manufacturing and trading capabilities.

Revenue Streams and Customer Base

The company’s revenue is diversified across its three main segments, with the Commodities segment being the most significant. However, this segment has experienced a 63% revenue decline due to external market conditions, impacting the overall financial performance. The customer base spans various geographical markets, and the company has been expanding its Metal Components segment to mitigate risks from other segments.

Income Statement Analysis

The financial year ending 30 September 2024 saw a drastic decline in revenue by 50% from 65.99 million SGD in FY2023 to 33.16 million SGD in FY2024. The net profit turned into a net loss of 10.78 million SGD from a net profit of 14.23 million SGD the previous year, indicating a significant downturn in profitability [[22]].

Balance Sheet Analysis

As of 30 September 2024, the company reported a decrease in total assets and equity. Current liabilities increased by 72%, primarily due to increased trade and other payables and advance payments from customers [[25-26]]. The net asset value per share declined to 0.77 Singapore cents from 1.08 Singapore cents a year earlier [[25]].

Cash Flow Statement Analysis

The company experienced a net cash outflow, with cash and cash equivalents decreasing to 6.17 million SGD. Operating activities generated 2.07 million SGD, while significant cash was used in investing and financing activities, primarily due to capital expenditures and loan repayments [[26]].

Dividend Information

No dividend was declared for FY2024 due to the net loss recorded for the year and the decision to conserve funds for business activities [[28]].

Key Findings and Recommendations

Strengths

• Diversified business segments provide multiple revenue streams.
• Efforts to expand the Metal Components segment show positive results.

Risks

• Significant revenue decline and net loss in FY2024.
• Increased liabilities and decreased cash reserves may impact financial stability.
• Market conditions in the Commodities segment pose ongoing challenges.

Special Activities

The company is focusing on operational efficiencies and exploring value-added services to mitigate the impact of increased labor costs in the ED Coating segment [[27]].

Investor Recommendations

If currently holding this stock, investors may consider reviewing their position due to the significant revenue decline and net loss. However, potential for recovery exists if market conditions improve.

If not holding this stock, it may be prudent to wait for signs of financial recovery and stabilization of market conditions before considering an investment.

Disclaimer

This analysis is based on the financial report for the year ended 30 September 2024 and should not be taken as financial advice. Investors should conduct their due diligence before making investment decisions.

View Sen Yue Historical chart here