Sanichi Technology Berhad: Navigating Challenges with Strategic Moves in Q4 FY2025
Greetings, fellow investors and market watchers! Today, we’re diving into the latest financial performance of Sanichi Technology Berhad, as revealed in their unaudited interim financial report for the fourth quarter ended 31 March 2025. This report offers a glimpse into the company’s journey, highlighting both its efforts to generate revenue and the ongoing challenges it faces in a dynamic market environment. While the company recorded revenue growth this quarter, it also reported continued losses. A significant event this period was a capital reduction exercise, which has positively impacted its net assets per share, reflecting a strategic financial restructuring.
Core Data Highlights: A Closer Look at Performance
Due to a change in the financial year-end from 31 December 2023 to 31 March 2024, direct comparative figures for the preceding year’s corresponding quarter and cumulative period are not available in this report. Therefore, our quarter-on-quarter analysis focuses on the immediate preceding quarter.
Current Quarter Performance (Q4 FY2025 vs. Q3 FY2025)
Sanichi Technology Berhad saw an encouraging increase in its revenue for the current quarter, but this was accompanied by a widening of its losses. Let’s break down the key figures:
Current Quarter
(31 March 2025)
Revenue: RM7.15 million
Loss Before Tax (LBT): (RM7.27 million)
Loss After Tax (LAT): (RM6.99 million)
Loss Attributable to Owners of Parent: (RM6.54 million)
Loss Per Share: (3.98 sen)
Immediate Preceding Quarter
(31 December 2024)
Revenue: RM5.48 million
Loss Before Tax (LBT): (RM3.60 million)
Loss After Tax (LAT): (RM3.90 million)
Loss Attributable to Owners of Parent: (RM3.91 million)
Loss Per Share: (N/A in report for Q3)
The Group recorded a revenue increase of approximately 30% from RM5.48 million in the immediate preceding quarter to RM7.15 million for the quarter ended 31 March 2025. This revenue growth was primarily driven by an increase in the property development division. However, the company’s loss before tax expanded from RM3.60 million to RM7.27 million, and its loss after tax also widened from RM3.90 million to RM6.99 million.
Full Year Performance (12 Months Ended 31 March 2025)
For the full financial year ended 31 March 2025, Sanichi Technology Berhad reported a total revenue of RM16.22 million. The cumulative loss before tax stood at (RM17.35 million), with a cumulative loss after tax of (RM17.96 million). The loss attributable to owners of the parent for the year was (RM17.65 million), resulting in a loss per share of (10.74 sen).
Segmental Contributions (Full Year FY2025)
The Group’s revenue of RM16.22 million for the full year was primarily contributed by its key business segments:
- Property Development: RM9.21 million
- Precision Mould: RM5.91 million
- Investment Holding: RM1.11 million
Financial Position: A Strengthened Balance Sheet
As at 31 March 2025, the company’s total assets were RM287.28 million, a decrease from RM305.99 million as at 31 March 2024. Total equity also saw a slight decrease to RM246.75 million from RM259.34 million. However, a notable positive development is the substantial increase in Net Assets Per Share attributable to owners of the parent, which jumped from RM0.18 as at 31 March 2024 to RM1.45 as at 31 March 2025. This significant improvement is largely attributed to the successful completion of a Proposed Capital Reduction on 3 February 2025, which reduced the issue share capital by offsetting accumulated losses of RM44.03 million. This strategic move aims to improve the company’s financial health and capital structure.
Group Borrowings
The Group’s total borrowings, all repayable in Ringgit Malaysia and secured, amounted to RM29.99 million as at 31 March 2025, a reduction from RM33.73 million as at 31 March 2024.
| As at 31 Mar 2025 (RM’000) | As at 31 Mar 2024 (RM’000) | |
|---|---|---|
| Short Term Borrowings | 4,364 | 5,452 |
| Long Term Borrowings | 25,622 | 28,273 |
| Total | 29,986 | 33,725 |
Cash Flow Analysis
For the 12 months ended 31 March 2025, the Group’s cash flow from operating activities showed a net cash usage of (RM43.32 million), an increase from RM32.86 million used in the preceding year’s corresponding period. Investing activities shifted from generating cash (RM6.89 million) to using cash (RM2.02 million). Financing activities saw a reduced net cash usage of (RM1.82 million), down from RM9.71 million. Overall, this led to a net decrease in cash and cash equivalents of (RM47.13 million), leaving the company with RM6.83 million in cash and cash equivalents at the end of the period, a significant drop from RM53.96 million a year ago.
Risks and Prospects: Navigating the Headwinds
Looking ahead to the financial year ending 31 March 2026, Sanichi Technology Berhad anticipates a challenging period. The company’s tooling business, which derives a significant portion of its revenue from overseas markets, remains vulnerable to the volatility of foreign exchange rates. Furthermore, the prevailing market uncertainty is contributing to a downtrend, which could adversely impact the fair value of Sanichi’s financial assets.
Despite these headwinds, the Group is taking proactive steps to strengthen its position. The completion of several share issuances in the previous year, alongside the expected completion of its property development project in Marina Point Melaka, are crucial initiatives aimed at bolstering the Group’s financial health. Management has indicated a cautious approach, emphasizing close market observation while actively exploring new business opportunities to navigate the uncertain landscape.
Status of Corporate Proposals and Utilization of Proceeds
Sanichi has been active on the corporate front, completing a Share Consolidation and a Capital Reduction exercise during the period. The company also has unutilised proceeds from a Rights Issue with Warrants, which are earmarked for strategic purposes:
- Repayment of bank borrowings: RM27.73 million unutilised (within 6 months timeframe)
- Funding for the Marina Point Project: RM14.73 million unutilised (within 6 months timeframe)
- Working capital for the Group’s plastic moulding business: RM14.03 million unutilised (within 24 months timeframe)
The total unutilised proceeds amount to approximately RM56.49 million, which, if deployed effectively, could provide crucial liquidity and funding for key projects and operations.
Summary and
Sanichi Technology Berhad’s latest quarterly report paints a picture of a company actively restructuring and pursuing growth amidst a challenging economic backdrop. While the revenue increase in the current quarter is a positive sign, the widening losses indicate that profitability remains a significant hurdle. The strategic capital reduction has visibly strengthened the company’s net assets per share, a crucial step in improving its financial standing. The unutilised proceeds from past corporate exercises offer a valuable resource for debt reduction, funding ongoing projects like Marina Point, and supporting its core plastic moulding business.
The road ahead for Sanichi is acknowledged by management to be challenging, with foreign exchange volatility and overall market uncertainty posing risks. However, the focus on completing key property developments and exploring new business avenues demonstrates a commitment to long-term sustainability.
Key points to consider moving forward:
- Profitability Turnaround: Despite revenue growth, the widening losses are a concern. Investors will be keen to see if the company can reverse this trend in subsequent quarters.
- Execution of Strategic Projects: The successful completion of the Marina Point Melaka project is vital for strengthening the Group’s financial health.
- Effective Utilization of Funds: How the remaining RM56.49 million in unutilised proceeds are deployed will be critical in shaping the company’s future liquidity and operational efficiency.
- Market and FX Volatility Management: The company’s ability to mitigate the impact of foreign exchange fluctuations and navigate overall market downtrends will be key to its stability.
Sanichi Technology Berhad is clearly in a phase of transformation, aiming to consolidate its financial position while expanding its revenue streams. The coming quarters will be crucial in observing how these strategic initiatives translate into improved financial performance.
What are your thoughts on Sanichi’s latest report? Do you believe the company’s strategic moves, particularly the capital reduction and the focus on the Marina Point project, will pave the way for a stronger financial future? Share your insights in the comments below!
Stay tuned for more updates and analyses on companies shaping Malaysia’s economic landscape.
