EMICO Holdings Navigates Shifting Tides: A Deep Dive into Q1 FY2026 Performance

Hello fellow investors and market enthusiasts!

Today, we’re taking a closer look at EMICO Holdings Berhad (Registration no. 199101020015 (230326-D)), a company that has been a steady presence in the Malaysian market. They’ve just released their unaudited condensed consolidated financial statements for the first quarter ended 30 June 2025, and there’s plenty to unpack. This report reveals a company demonstrating resilience and strategic adaptation, with overall net profit showing a modest increase despite a slight dip in pre-tax profit, driven by key segmental shifts. Let’s dive into the details and see what’s shaping EMICO’s journey.

Decoding EMICO’s Financial Performance

The first quarter of the financial year 2026 (FY2026) for EMICO Holdings (3 months ended 30 June 2025) presents a mixed, yet ultimately positive, picture when compared to the same period last year (3 months ended 30 June 2024). While the overall revenue saw a modest increase, the underlying performance across business segments tells a story of strategic recalibration.

Overall Financials (Q1 FY2026 vs Q1 FY2025)

EMICO recorded a 2.30% increase in revenue, climbing to RM17.081 million from RM16.695 million in the same quarter last year. However, gross profit experienced a 10.63% dip, moving from RM4.240 million to RM3.794 million. This indicates a higher cost of sales relative to revenue growth during the period. Despite this, operating profit saw a 2.33% improvement, rising to RM1.494 million from RM1.460 million, largely attributed to reduced sales and marketing, and administrative expenses. Pre-tax profit (PBT) slightly decreased by 0.99% to RM1.303 million, but net profit for the period managed to eke out a 2.85% gain, reaching RM1.084 million, demonstrating effective tax management. Basic Earnings Per Share (EPS) saw a slight decrease from 0.80 sen to 0.79 sen.

Business Unit Performance (Q1 FY2026 vs Q1 FY2025)

A closer look at EMICO’s segments reveals the drivers behind the overall figures:

• Manufacturing and Trading – Consumer Products: This division’s revenue decreased by 13.09% to RM14.510 million from RM16.695 million. Consequently, its segment result (profit before tax equivalent for the segment) plummeted by 74.99% to RM0.476 million from RM1.895 million. This decline was primarily due to lower sales from both manufacturing and trading activities.
• Property Development: This segment emerged as a significant growth engine. It generated RM2.571 million in revenue in the current quarter, compared to no revenue in the corresponding quarter last year. This remarkable turnaround translated into a segment profit of RM1.212 million, a substantial improvement from a loss of RM0.073 million previously.
• Investment Holdings: This division recorded a reduced loss before tax of RM0.194 million, compared to a loss of RM0.362 million in the same period last year, indicating an improvement in managing investment-related expenses.

The stellar performance of the Property Development division effectively softened the impact of the challenges faced by the Manufacturing and Trading segment, highlighting EMICO’s diversification strategy at work.

Financial Health: A Snapshot of the Balance Sheet

As of 30 June 2025, EMICO’s financial position remained robust:

Total assets grew by 1.78% to RM101.226 million from RM99.458 million at 31 March 2025, while total equity increased by 3.49% to RM63.532 million. Notably, total borrowings decreased by 17.53% from RM13.956 million (31 March 2025) to RM11.510 million (30 June 2025), reflecting a healthier debt profile. Net assets per share remained stable at RM0.40.

Cash Flow Dynamics (3 months ended 30 June 2025)

For the current quarter, EMICO demonstrated strong operational cash generation:

• Net cash generated from operating activities: RM5.491 million. This positive inflow indicates healthy business operations, driven by favorable changes in working capital, including a decrease in inventories and an increase in trade and other payables.
• Net cash used in investing activities: RM2.948 million. This outflow is primarily due to the purchase of property, plant, and equipment, suggesting ongoing investments in expanding or upgrading operational capabilities.
• Net cash used in financing activities: RM0.267 million. This reflects a net repayment of bank borrowings and lease liabilities, partially offset by proceeds from the issuance of new shares.

Overall, the group reported a net increase of RM2.276 million in cash and cash equivalents for the quarter, significantly boosting their cash position at period-end.

Risks and Prospects: Charting the Future Course

EMICO Holdings is not just reporting numbers; it’s actively strategizing for the future, balancing potential risks with clear growth opportunities across its segments.

Manufacturing and Trading Outlook

The manufacturing and trading division, particularly the trophy and award segment, is actively pursuing growth. The division is focusing on strengthening its supply chain for resin and glass trophies within its Southeast Asian network, aiming to expand its presence in the international trophy market. Despite economic uncertainties, the trophy market outlook remains stable, with expectations of gradual improvement in both export and domestic sales.

A significant opportunity arises from ongoing US-China trade tensions, which have led to a realignment of global supply chains. EMICO is leveraging this shift to expand its market share in the trophy export segment, particularly in the US and Canada, positioning itself as a competitive alternative supplier. Active discussions with prospective international customers are underway, with successful collaborations expected to drive sales and optimize production capacity.

Recent participation in the Hong Kong Gifts and Premium Fair (HKGP) and the Malaysia Gifts and Premium Fair (MGF) yielded positive results, securing numerous orders and fostering new project collaborations, which are anticipated to contribute positively to revenue growth. The contract manufacturing division is also exploring opportunities in diverse industries to broaden its customer portfolio, marking it as a key focus for long-term growth.

However, potential headwinds include external factors like US tariffs and global sentiment, which could limit export demand.

Property Development Momentum

The property development division is building on its recent success. The group is aggressively marketing and promoting its remaining completed properties to accelerate sales. Looking ahead, EMICO is planning a new commercial development project in Taman Batik, Sungai Petani, Kedah. This strategic project, located next to Mydin Hypermarket and with easy access to the Eastern Bypass, will feature 60 single-storey shop office units, catering to evolving commercial needs in a mature and densely populated township.

No Dividend Declared

The Directors have not recommended any dividend for the financial period ended 31 March 2025.

From a professional standpoint, EMICO Holdings is navigating a dynamic economic landscape by leveraging its strengths and adapting its business model. The strategic diversification into property development is clearly paying off, while the efforts to rejuvenate and expand the core manufacturing and trading business through innovation and market realignment are commendable. The positive cash flow generation is a healthy sign of operational efficiency.

What are your thoughts on EMICO’s latest performance? Do you believe their property development momentum can continue to offset challenges in other segments, or are you more optimistic about their international expansion plans for the trophy market? Share your insights in the comments below!