A Look at the Numbers: Strong Revenue Growth, Strategic Sector Shifts

Quarterly Performance Snapshot (1 April 2025 – 30 June 2025 vs. Same Period Last Year)

MyTech Group Berhad delivered a commendable increase in revenue and profit before tax (PBT) for the quarter, reflecting a dynamic operational landscape. Here’s a direct comparison of the first quarter of the current financial year against the corresponding quarter of the previous financial year:

Revenue for the quarter increased by 7% from RM3.592 million to RM3.852 million, while Profit Before Taxation (PBT) saw a 3% rise to RM1.451 million. However, Profit After Taxation (PAT) experienced a slight dip of 4%, settling at RM1.184 million, mainly due to a higher tax provision this quarter. Similarly, basic Earnings Per Share (EPS) for equity holders saw a minor decrease to 0.49 sen from 0.53 sen, influenced by the lower PAT attributable to equity holders and an increased number of shares in issue following a private placement.

Sequential Performance (Q1 FY2025 vs. Immediate Preceding Quarter)

Comparing the current quarter’s results against the immediate preceding quarter (Q4 FY2024, ended 31 March 2025), MyTech showed significant improvements, indicating positive recent operational trends:

This sequential growth highlights an accelerating momentum, especially in profitability, with PBT surging by 92% and PAT by 72% from the prior quarter. This is a very positive sign for the company’s recent operational efficiency, showcasing strong internal improvements.

Business Segment Performance: Moneylending Shines Bright

Delving into MyTech’s business units reveals a tale of two segments:

• Manufacturing Division (Wire Master Spring Sdn Bhd): This segment recorded a revenue of RM3.218 million for the quarter, a slight decrease of 2% compared to RM3.298 million in the corresponding period last year. Pre-tax profit also declined by 12% to RM1.152 million from RM1.315 million. Management attributes this to a slow start to the financial year (which commences 1 April) but anticipates a pickup in the second quarter (July-September 2025).
• Moneylending Division (GW Premium Capital Sdn Bhd): This segment was the standout performer, with revenue soaring to RM0.517 million, an impressive 192% increase from RM0.177 million in the previous corresponding period. Pre-tax profit also jumped by a remarkable 200% to RM0.510 million from RM0.170 million. This strong growth is attributed to banks having more stringent approval processes for loans, creating an opportune market for MyTech’s moneylending business.

Robust Financial Health and Strategic Cash Management

MyTech’s balance sheet and cash flow statement also present a strong picture, indicating improved financial stability and strategic resource management:

• Net Assets Per Share: Increased to RM0.21 as at 30 June 2025, from RM0.20 as at 31 March 2025. This shows a growing book value per share for equity holders.
• Cash and Cash Equivalents: Grew significantly to RM15.891 million as at 30 June 2025, up from RM10.007 million at the end of the previous financial year. This enhanced liquidity positions the company well for future investments.
• Cash Flow from Operations: A remarkable turnaround! The Group generated RM2.831 million in cash from operating activities this quarter, a stark contrast to the cash outflow of RM10.678 million in the same period last year. This demonstrates improved operational efficiency and working capital management, turning a significant negative into a positive.
• Zero Borrowings: As at 30 June 2025, MyTech Group has no short-term or long-term bank borrowings, a strong indicator of financial stability and independence, significantly reducing financial risk.
• Private Placement: The successful issuance of 11,188,000 shares at RM0.3050 per share through a private placement on 3 April 2025 raised RM3.412 million, further strengthening the company’s equity base and cash position.

Navigating the Future: Prospects and Strategic Directions

MyTech Group Berhad is not just resting on its laurels but actively pursuing strategies for sustained growth, while also acknowledging areas that require focused attention.

Key Prospects:

• Manufacturing Resilience and Expansion: Despite the current quarter’s slight dip, the manufacturing division is expected to regain momentum and continue to generate revenue and pre-tax profit, sustaining its operations and fostering future growth. The company is actively looking into overseas markets to expand this segment’s reach and diversify its revenue streams.
• Value Chain Enhancement: The Group aims to enhance its value chain through effective procurement strategies, which are designed to boost Earnings Per Share (EPS) over time by optimizing costs and improving efficiency.
• Strategic Investments: The Board maintains a mandate to cautiously explore feasible investment opportunities that will maximize group EPS and ultimately enhance shareholder value, suggesting potential mergers, acquisitions, or new business ventures.
• Moneylending Momentum: Given the favorable market conditions where banks are more stringent with loan approvals, the moneylending division is poised for continued strong growth, capitalizing on a sustained market need.

Considerations and Potential Challenges:

While the outlook is generally positive, it’s prudent for investors to consider the following aspects:

1. Manufacturing Sector Headwinds: The slight decline in manufacturing revenue and profit for the current quarter, though expected to recover, indicates potential vulnerability to market fluctuations or competitive pressures in this segment. Global economic slowdowns or shifts in supply chains could impact demand.
2. Reliance on Moneylending Growth Drivers: While highly successful, the rapid growth of the moneylending division hinges on the current economic climate and banking policies. Any significant shift in these external factors, such as easing bank loan approvals or increased competition, could impact its exceptional growth rate.
3. Foreign Exchange Exposure: As noted in the cash flow statement, MyTech experienced an unrealised loss on foreign exchange. As the company looks towards overseas markets for growth, managing currency fluctuations will be an important factor to monitor.

Your Thoughts?

MyTech Group Berhad appears to be effectively pivoting its strategy to capitalize on market opportunities, especially with its moneylending segment flourishing. The challenge now lies in sustaining this momentum while bolstering the manufacturing arm to its full potential. Do you believe MyTech can maintain its impressive growth trajectory in the moneylending sector, and successfully reignite its manufacturing division in the coming quarters? Share your insights and perspectives in the comments section below!