CHEETAH HOLDINGS BERHAD Q3 2025 Latest Quarterly Report Analysis

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Hello, fellow Malaysian retail investors!

Today, we’re diving into the latest interim financial report from CHEETAH HOLDINGS BERHAD for the third quarter ended 31 March 2025. As a prominent player in the Malaysian sports apparel and casual wear market, Cheetah’s performance often reflects broader consumer sentiment and economic trends. This report presents a mixed bag, showcasing both resilience and the impact of external headwinds. While the quarter saw a slight revenue increase compared to the same period last year, and a significant quarter-on-quarter recovery, the cumulative nine-month performance paints a more challenging picture.

Let’s break down the numbers and understand what’s shaping Cheetah’s journey.

Decoding the Numbers: A Deep Dive into Performance

Quarterly Performance: Current Quarter vs. Previous Corresponding Quarter

Comparing the third quarter of this financial year (ended 31 March 2025) with the same period last year, we see a modest top-line growth but a significant dip in profitability.

The Group’s revenue saw a marginal increase of RM0.41 million, or 1.00%, reaching RM41.06 million. This slight uptick is attributed to increased footfall, suggesting a steady, albeit modest, consumer engagement. However, the Profit Before Tax (PBT) experienced a substantial decline of RM3.99 million, or 64.22%, settling at RM2.22 million. The primary reason for this sharp decrease was a fair value loss on investment in quoted shares, highlighting how market fluctuations can impact non-operational earnings.

Quarter-on-Quarter Momentum: Current Quarter vs. Immediate Preceding Quarter

Looking at the sequential performance, the picture is much brighter, indicating a strong rebound from the previous quarter.

Revenue surged by RM10.84 million, or 35.87%, to RM41.06 million from RM30.22 million in the immediate preceding quarter. This robust growth is largely thanks to heightened consumer activity during the festival season and school holidays, which spurred purchases of new apparel. Consequently, the Group successfully swung from a loss of RM2.35 million in the previous quarter to a profit of RM2.22 million, an impressive improvement of RM4.57 million, or 194.80%. This turnaround was also bolstered by a higher fair value gain adjustment on quoted shares in the current quarter.

Cumulative 9-Month Performance: A Broader View

While the latest quarter showed resilience, the cumulative performance for the nine months ended 31 March 2025 reveals a more challenging period overall.

The cumulative revenue for the nine months decreased slightly to RM95.05 million from RM97.87 million in the previous corresponding period. More significantly, the Group recorded a cumulative loss before tax of RM9.95 million, a stark contrast to the RM5.54 million profit recorded in the same period last year. This substantial shift into a loss position for the nine-month period is largely influenced by the fair value adjustments on investments, which can be volatile.

Financial Health Check: Balance Sheet and Cash Flow

As of 31 March 2025, Cheetah’s balance sheet reflects the impact of the year-to-date performance.

• Total Assets stood at RM130.47 million, a decrease from RM133.90 million as of 30 June 2024.
• Total Equity also saw a reduction to RM112.58 million from RM122.53 million, primarily due to the comprehensive loss incurred. This also led to a decrease in Net Assets per share to RM0.23 from RM0.25.
• Current Liabilities increased to RM15.97 million from RM10.67 million, while Short-term Borrowings (Banker’s acceptance) saw a slight decrease to RM3.99 million from RM4.18 million at the end of the previous quarter.

From a cash flow perspective, the Group utilized more cash from operating activities over the nine-month period, with a net cash outflow of RM5.16 million compared to RM0.66 million in the prior year. However, cash generated from financing activities turned positive, reaching RM1.07 million, compared to a net cash outflow of RM2.31 million in the previous period. Despite the cumulative loss, the cash and cash equivalents at the end of the period stood at RM14.03 million, a healthy increase from RM5.05 million in the same period last year, indicating improved liquidity from a year-on-year perspective.

Navigating Challenges: Risks and Prospects

The retail garment industry, while resilient, is not immune to broader economic pressures. CHEETAH HOLDINGS BERHAD acknowledges the challenging and volatile economic outlook. Key concerns include:

• Rising interest rates
• Supply chain disruptions
• Increasing material costs
• Higher labour and freight charges

Despite these headwinds, the Group remains vigilant and is focusing on internal strategies to mitigate risks and enhance performance. Their key initiatives include:

• Emphasizing better cost control across operations.
• Scaling up automation initiatives to improve efficiency.
• Improving overall operational efficiency to streamline processes.

These strategies are crucial for maintaining competitiveness and profitability in a dynamic market environment.

What are your thoughts on Cheetah Holdings Berhad’s performance? Do you think their strategic focus on cost control and automation will be enough to navigate the challenging economic landscape? Share your insights and perspectives in the comments section below!

Stay tuned for more updates and analyses on Malaysian companies. Happy investing!