Hong Leong Capital Berhad’s Q3 FY2025: A Deep Dive into the Latest Financials
May 28, 2025
Hello, fellow investors! Today, we’re taking a closer look at the recent financial performance of Hong Leong Capital Berhad (HLCB), a prominent player in Malaysia’s financial landscape. The company has just released its unaudited results for the third quarter ended March 31, 2025, and while some headline figures might appear challenging, a deeper dive reveals the underlying dynamics and strategic maneuvers at play.
This report offers a comprehensive view of HLCB’s operational health, showcasing both areas of strength and those facing headwinds. Notably, while the Group’s profit before tax saw a decline this quarter, its Fund Management and Unit Trust Management segment demonstrated impressive resilience and growth. Let’s break down the numbers and understand what they mean for HLCB’s journey ahead.
Core Financial Performance: A Mixed Bag
HLCB’s third quarter of the financial year 2025 (3Q FY2025) presented a mixed financial picture. The Group reported a lower profit before tax (PBT) compared to the same period last year, primarily influenced by a decrease in non-interest income.
Quarterly Performance (31 March 2025 vs. 31 March 2024)
Net Income:
RM46,632,000
Compared to Last Year:
RM63,299,000
Profit Before Tax (PBT):
RM15,335,000
Compared to Last Year:
RM27,086,000
Net Profit for the Period:
RM10,908,000
Compared to Last Year:
RM22,470,000
Basic Earnings Per Share (EPS):
4.6 sen
Compared to Last Year:
9.5 sen
The PBT for the current quarter was
than the previous corresponding quarter, while net profit saw an even sharper decline of
. This was primarily driven by a significant reduction in non-interest income.
Year-to-Date Performance (Nine Months Ended 31 March 2025 vs. 31 March 2024)
Net Income:
RM155,005,000
Compared to Last Year:
RM177,240,000
Profit Before Tax (PBT):
RM56,519,000
Compared to Last Year:
RM73,945,000
Net Profit for the Period:
RM40,798,000
Compared to Last Year:
RM61,155,000
Basic Earnings Per Share (EPS):
17.3 sen
Compared to Last Year:
25.9 sen
For the nine-month period, HLCB’s PBT decreased by
, while net profit was
. Again, the primary factor cited was lower non-interest income.
Segmental Performance: A Closer Look
Understanding the performance of HLCB’s individual business segments provides critical insights into the overall results:
| Segment | PBT Q3 FY2025 (RM’000) | PBT Q3 FY2024 (RM’000) | Change (%) | Key Factors |
|---|---|---|---|---|
| Investment Banking and Stockbroking | 12,355 | 13,937 | -11.4% | Lower profit contribution from the stockbroking division. |
| Fund Management and Unit Trust Management | 4,947 | 1,977 | >100.0% | Higher PBT driven by lower overhead expenses. |
| Investment Holding and Others | (1,967) | 11,172 | -117.6% | Recorded a loss primarily due to revaluation loss of financial assets at Fair Value Through Profit or Loss (FVTPL). |
The Fund Management and Unit Trust Management segment stands out as a strong performer, demonstrating significant growth due to effective cost management. Conversely, the Investment Holding and Others segment faced challenges from revaluation losses, impacting the Group’s overall profitability.
Financial Health and Balance Sheet Highlights
As of March 31, 2025, HLCB’s total assets stood at RM4,974,918,000, a decrease from RM5,279,559,000 as of June 30, 2024. Correspondingly, total liabilities also decreased to RM3,954,791,000 from RM4,252,396,000. This shift reflects changes in various financial instruments and client balances.
A notable change was the increase in cash and short-term funds to RM362,462,000 from RM153,589,000, indicating improved liquidity. Net assets per share saw a slight dip from RM4.36 to RM4.33, reflecting the quarter’s performance.
Risks and Prospects: Navigating the Global Currents
HLCB acknowledges the rapidly evolving global economic outlook, particularly the challenges posed by recent tariff-related measures on global growth and inflation. However, the company remains optimistic about Malaysia’s position to navigate these headwinds.
The report highlights several key factors underpinning Malaysia’s resilience:
- Strong Domestic Demand: Expected to continue supporting growth, buoyed by a robust labour market.
- Government Initiatives: Efforts aimed at boosting household incomes and domestic investment initiatives are anticipated to provide further support.
- Diversified Export Base: Malaysia’s varied export portfolio, encompassing both products and trading partners, is expected to cushion the impact of external shocks.
These domestic strengths are crucial for HLCB, as its operations are predominantly concentrated within Malaysia. The company’s ability to adapt to market conditions and leverage these national tailwinds will be key to its future performance.
Dividends: A Return to Shareholders
While the Board of Directors did not recommend any dividend for the financial period ended March 31, 2025, it’s worth noting that HLCB previously declared a final single-tier dividend of 22.0 sen per share for the financial year ended June 30, 2024. This dividend, amounting to RM54.3 million, was paid on November 20, 2024, demonstrating the company’s commitment to shareholder returns from its prior financial year’s performance.
Summary and Outlook
Hong Leong Capital Berhad’s Q3 FY2025 results present a mixed financial picture. The Group experienced a decline in overall profitability, mainly attributed to lower non-interest income and revaluation losses in its investment holding segment. However, the strong performance of its Fund Management and Unit Trust Management division highlights an area of operational strength and effective cost management. The company remains optimistic about Malaysia’s economic resilience, driven by domestic demand and diversified exports, despite global uncertainties.
Key takeaways from this report include:
- Overall PBT and net profit declined significantly compared to the previous corresponding quarter, primarily due to lower non-interest income.
- The Investment Banking and Stockbroking segment faced reduced profit contribution, particularly from its stockbroking division.
- The Fund Management and Unit Trust Management segment showed strong growth, driven by lower overhead expenses.
- The Investment Holding and Others segment recorded a loss due to revaluation of financial assets.
- The company’s balance sheet remains stable, with an increase in cash and short-term funds.
- HLCB acknowledges global economic challenges but is confident in Malaysia’s domestic resilience factors.
Looking ahead, HLCB’s ability to navigate the volatile market environment, optimize its various business segments, and capitalize on Malaysia’s economic stability will be crucial. Investors should monitor how the company adapts its strategies to improve non-interest income and manage market-related risks in its investment portfolio.
