Greetings, fellow investors and market enthusiasts! Today, we’re diving deep into the latest financial performance of NI HSIN GROUP BERHAD, as revealed in their interim financial statements for the period ended 31 March 2025. This report offers a crucial glimpse into the company’s journey, highlighting both the hurdles they’re overcoming and the strategic shifts they’re making to secure future growth.

A key point to note upfront is the company’s change in financial year-end from 31 December to 30 June. This adjustment means direct year-on-year comparisons for the current quarter are not available. However, the report provides valuable insights through a quarter-on-quarter comparison with the immediate preceding period and cumulative performance over the past 15 months.

Despite facing a typically slower sales period and incurring losses, NI HSIN GROUP BERHAD is actively re-positioning itself, with a significant revaluation of property boosting its asset base and a positive net cash position. Let’s break down the numbers and strategic moves shaping their path forward.

Core Financial Highlights: A Closer Look at Performance

Current Quarter Performance (3 months ended 31 March 2025 vs. 3 months ended 31 December 2024)

The latest quarter, Q5 2025, reflects a challenging period for the Group, with a notable decline in key financial metrics compared to the immediate preceding quarter (Q4 2024). This was primarily attributed to lower sales, particularly in the Stainless Steel Products Division, and the typical seasonality of sales during this period.

The Group’s gross profit margin for Q5 2025 stood at a mere 0.72%, a significant drop from the previous quarter, indicating the impact of lower sales volumes on profitability. Operating expenses remained substantial at RM2.92 million, driven by staff costs, depreciation, and marketing efforts.

Cumulative Performance (15 months ended 31 March 2025)

For the extended 15-month period, NI HSIN GROUP BERHAD recorded a cumulative revenue of RM41.88 million and a gross profit of RM7.84 million, translating to a 19% gross profit margin. The Group posted a loss before taxation of RM8.58 million and a loss for the period of RM8.54 million, resulting in a basic loss per share of (1.64) sen.

Financial Health: Balance Sheet and Cash Flow

As at 31 March 2025, the Group’s total assets saw a healthy increase to RM121.40 million from RM107.47 million at 31 December 2023. This growth was primarily fueled by a significant revaluation of the Group’s property and an increase in right-of-use assets by RM3.35 million. Consequently, net assets per share attributable to owners improved to RM0.18 from RM0.17.

However, total liabilities also increased to RM27.74 million from RM17.11 million. Inventories rose to RM22.32 million, largely in the Stainless Steel Products and EV Divisions, and receivables increased due to deposits for new inventory. Short-term borrowings also increased to RM3.95 million to support working capital needs.

Despite the operating losses, the Group maintains a positive net current assets position of RM26.84 million and a net cash position of RM4.07 million after deducting all borrowings. Cash and cash equivalents stood at RM5.95 million at the end of the period, though the 15-month period saw a net decrease of RM9.17 million in cash and cash equivalents, primarily due to net cash outflows from operating and investing activities, partially offset by financing activities.

Business Unit Performance: Diversification in Action

NI HSIN GROUP BERHAD is actively diversifying its revenue streams across several key divisions. Here’s a snapshot of their revenue contribution for the 15 months ended 31 March 2025:

• Cookware Division: Achieved RM11.92 million in revenue, driven by strong sales in local markets, Thailand, Japan, and improved sales to the USA due to higher tariffs on China products. The Group is expanding production to meet demand.
• Stainless Steel Products Division: Contributed RM13.04 million, mainly from Japan and European customers. Negotiations for a new convex mirror customer in China are ongoing, and a Thai customer has confirmed their first order.
• Food and Beverages Division: Recorded RM8.90 million, significantly boosted by the opening of the third and fourth Blackbixon Café & Restaurant outlets. The coffee capsule business is also expanding its reach to hotels and Airbnb.
• Logistics Division: Saw RM3.04 million in revenue, benefiting from newly secured customers.
• Electric Vehicles (EV) Division: Generated RM4.87 million, with improved sales attributed to marketing efforts and government incentives for EV adoption. The division is actively seeking strategic partnerships and planning promotional campaigns.

Risk and Prospect Analysis: Charting the Future Course

While the Group is currently navigating through operating losses, its strategic initiatives signal a proactive approach to future growth. The expansion of production facilities for the Cookware Division, coupled with new customer acquisitions and product development in the Stainless Steel Products Division, are expected to drive improvements in sales and profitability in the coming quarters.

The Food and Beverages Division, with its expanding Blackbixon Cafe network and coffee capsule business, demonstrates a commitment to market penetration and customer engagement. The EV Division is a significant growth area, leveraging government policies and incentives. The numerous MOUs and agreements signed with various entities, including state governments, universities, and corporate partners, underscore a robust strategy to expand the EV ecosystem and market reach.

The Token Crowd Funding (TCF) project, currently awaiting approval from the Securities Commission, could provide an additional avenue for funding and growth. These forward-looking initiatives indicate a clear vision for diversification and market leadership in their respective segments.