Welcome, fellow investors and market enthusiasts! Today, we’re diving into the latest financial pulse of POH KONG HOLDINGS BERHAD (PKHB), a prominent name in Malaysia’s jewellery and gold industry. The company has just released its unaudited condensed consolidated results for the third quarter ended 30 April 2025 (Q3 FY2025).
This report offers a fascinating glimpse into how PKHB is navigating the dynamic market, especially with the recent surge in gold prices. While the individual quarter’s profit after tax saw a minor dip, the company’s year-to-date performance remains robust, showcasing a commendable increase in both revenue and profit before tax. Let’s unpack the key figures and what they mean for this established Malaysian entity.
Core Data Highlights: A Closer Look at PKHB’s Performance
PKHB’s financial results for Q3 FY2025 reflect a mixed but generally positive picture, particularly when looking at the cumulative performance over the nine months. The surge in gold prices has clearly played a significant role.
Individual Quarter Performance (Q3 FY2025 vs Q3 FY2024)
For the quarter under review, PKHB reported an increase in revenue but a slight decrease in profit after tax compared to the same period last year.
Q3 FY2025
Revenue: RM533.93 million
Profit Before Tax: RM66.60 million
Profit After Tax: RM47.60 million
Basic Earnings Per Share: 11.60 sen
Q3 FY2024
Revenue: RM519.61 million
Profit Before Tax: RM61.77 million
Profit After Tax: RM47.65 million
Basic Earnings Per Share: 11.61 sen
Revenue for Q3 FY2025 grew by RM14.32 million, a 2.76% increase, primarily driven by the surge in gold prices. Profit before tax saw a healthy 7.82% increase, rising by RM4.83 million. However, Profit after tax experienced a marginal decline of 0.09%, or RM0.04 million, resulting in a minor dip in basic earnings per share from 11.61 sen to 11.60 sen.
Year-to-Date Performance (9 Months FY2025 vs 9 Months FY2024)
Looking at the cumulative nine-month period, PKHB demonstrates a strong growth trajectory:
9 Months FY2025
Revenue: RM1,322.72 million
Profit Before Tax: RM131.81 million
Profit After Tax: RM98.54 million
Basic Earnings Per Share: 24.01 sen
9 Months FY2024
Revenue: RM1,299.41 million
Profit Before Tax: RM122.76 million
Profit After Tax: RM94.90 million
Basic Earnings Per Share: 23.13 sen
Year-to-date revenue climbed by RM23.31 million, marking a 1.79% increase. Profit before tax surged by RM9.05 million, a significant 7.37% improvement, while profit after tax grew by RM3.64 million, representing a 3.84% rise. This translated to an increase in basic earnings per share from 23.13 sen to 24.01 sen.
Quarter-on-Quarter Comparison (Q3 FY2025 vs Q2 FY2025)
Comparing the latest quarter to the immediate preceding quarter reveals impressive momentum:
| Financial Indicators | Q3 FY2025 (RM’000) | Q2 FY2025 (RM’000) | Variance (RM’000) | Variance (%) |
|---|---|---|---|---|
| Revenue | 533,927 | 459,514 | 74,413 | 16% |
| Profit before taxation | 66,595 | 37,831 | 28,764 | 76% |
| Profit after taxation | 47,603 | 29,600 | 18,003 | 61% |
The report highlights that the increase in profit from Q2 to Q3 was mainly due to higher revenue in the current quarter, indicating a strong sequential performance driven by the peak trading period and gold price trends.
Financial Health & Cash Flow
PKHB’s balance sheet reflects a healthy financial position as of 30 April 2025:
- Total Assets grew to RM1,186.25 million from RM1,093.05 million (as at 31 July 2024), an increase of 8.52%.
- Total Equity attributable to owners of the company increased to RM958.07 million from RM871.83 million, a 9.89% increase. This pushed the Net Assets Per Share up to RM2.33 from RM2.12.
- Inventories saw a significant increase to RM946.28 million from RM845.14 million, reflecting higher stock levels, likely in anticipation of continued strong demand or due to higher gold prices.
- Total Borrowings decreased to RM143.73 million (as at 30 April 2025) from RM174.07 million (as at 30 April 2024), a substantial reduction of 17.43%, indicating improved debt management.
The cash flow statement further reinforces the positive picture:
- Net cash generated from operating activities for the nine months surged to RM37.28 million, a significant improvement from RM22.47 million in the same period last year, marking a 65.97% increase.
- The Group ended the period with an increase in cash and cash equivalents of RM1.53 million, a positive reversal from a decrease of RM2.36 million in the prior year, bringing closing cash and cash equivalents to RM35.45 million.
Segmental Performance
PKHB operates primarily in Manufacturing, Trading, and “Others” (investment holding and gold bullion). The Trading segment, which involves supplying and retailing gold ornaments, jewellery, precious stones, and gold bullion, remains the core revenue driver. The report indicates that the overall uptrend in gold prices has significantly improved operating profits across the Group, especially within the retail segment.
Risks and Prospects: Navigating the Golden Path Ahead
The company’s prospects are intrinsically linked to the price of gold and broader economic conditions. PKHB acknowledges that while the surge in gold prices has boosted revenue, the global economic landscape presents both opportunities and challenges.
The report notes that during periods of economic disruption, gold demand typically surges as investors seek protection against inflation and market volatility, reinforcing gold’s role as a safe-haven asset. This trend has undoubtedly benefited PKHB’s performance.
However, the company also highlights potential headwinds:
- Global Trade Tensions: The report mentions global trade tensions dramatically disrupting production and trade patterns worldwide. This can lead to supply chain uncertainties and impact consumer spending.
- Market Volatility: While gold prices have surged, they are also subject to volatility, which can affect inventory valuation and sales margins.
In response to these uncertainties, the board of directors expresses confidence that the group has implemented adequate measures to meet the challenges for the financial year ending 31 July 2025. This suggests ongoing monitoring of market conditions, upholding financial obligations, and continuous evaluation of performance.
Furthermore, the report discloses contingent liabilities amounting to RM227.39 million in corporate guarantees for banking facilities granted to subsidiary companies, RM11.00 million for leasing and hire purchase facilities to third parties, and RM3.83 million for operating lease arrangements. While these are common business practices, they represent potential future obligations.
Summary and Investment Recommendations
POH KONG HOLDINGS BERHAD’s Q3 FY2025 report paints a picture of a resilient company benefiting from favourable market conditions, particularly the rising gold prices. The year-to-date performance shows solid growth in revenue and profitability, underpinned by strong cash flow generation and improved financial health with reduced borrowings and increased net assets per share. The management’s proactive approach in monitoring the market and implementing strategies to navigate potential challenges is a positive sign.
Key highlights include:
- Solid year-to-date revenue growth of 1.79% and profit before tax growth of 7.37%.
- Significant quarter-on-quarter improvements in revenue and profitability (16% and 76% respectively for PBT).
- Strong cash flow from operations, indicating efficient business activities.
- Improved balance sheet with increased total equity and net assets per share, alongside a reduction in overall borrowings.
- Strategic positioning to capitalize on gold’s safe-haven appeal amidst global uncertainties.
Despite the positive momentum, potential investors should be mindful of the inherent volatility in gold prices and the broader impact of global trade tensions on consumer sentiment and operational costs. The company’s ability to maintain its growth trajectory will depend on its continued adaptability to these external factors.
What’s Next for PKHB?
PKHB’s latest quarterly report provides a compelling narrative of growth driven by market dynamics and sound operational management. The company has demonstrated its ability to leverage the current economic climate, particularly the demand for gold as a safe-haven asset.
As we look ahead, the key question for POH KONG HOLDINGS BERHAD will be its ability to sustain this momentum amidst potential fluctuations in gold prices and ongoing global economic shifts. Can PKHB continue to innovate and expand its market reach, or will it face significant headwinds from external pressures?
What are your thoughts on PKHB’s latest performance? Do you believe the current gold price trend will continue to be a strong tailwind for the company, or are you more concerned about the broader economic uncertainties? Share your insights in the comments below!
