Pan Merchant Berhad’s Q1 2025 Debut: A First Look at Their Financial Performance Post-IPO
Hello fellow Malaysian investors! Today, we’re diving into the first-ever interim financial report from Pan Merchant Berhad for the first quarter ended 31 March 2025. This report is particularly significant as it marks their debut as a publicly listed entity on Bursa Malaysia’s ACE Market, with the listing expected on June 26, 2025.
Given this is their inaugural report as a listed company, it’s important to note that there are no comparative figures for the preceding corresponding quarter. This means we’ll be focusing on the performance of Q1 2025 itself and comparing balance sheet items to the last audited financial year-end (31 December 2024). Let’s unpack the numbers and see what Pan Merchant Berhad has achieved in its first quarter!
Core Data Highlights: A Solid Start
Overall Financial Performance (Q1 2025)
Pan Merchant Berhad, a solutions provider of solid liquid filtration equipment, fabrication of steel works, and technical support services, reported a commendable performance for its first quarter.
- Revenue: The Group recorded a total revenue of RM27.35 million for the quarter.
- Profit Before Taxation (PBT): PBT stood at RM1.01 million.
- Profit After Taxation (PAT): The company achieved a PAT of RM0.90 million.
- PBT Margin: The PBT margin for the quarter was 3.70%, reflecting the company’s profitability amidst its initial operational phase as a public entity.
It’s worth reiterating that these figures represent the company’s performance for the first time as a reporting public entity, and thus, direct year-on-year comparisons are not available in this report.
Revenue Breakdown by Business Segment
Understanding where the revenue comes from gives us a clearer picture of the Group’s core strengths:
| Business Segment | Revenue (RM’000) – Q1 2025 | Contribution to Total Revenue |
|---|---|---|
| Filtration Solutions (Filter Presses & Hermetic Filters) | 18,370 | 67.2% |
| Steel Works | 1,554 | 5.7% |
| Technical Support Services | 7,421 | 27.1% |
| Total | 27,345 | 100% |
The Filtration Solutions segment clearly dominates, contributing over two-thirds of the total revenue, underscoring its importance to the Group’s operations.
Geographical Revenue Distribution
Pan Merchant Berhad has a diversified global footprint, with revenue generated from various regions:
| Geographical Segment | Revenue (RM’000) – Q1 2025 |
|---|---|
| Malaysia | 8,097 |
| America | 7,272 |
| Europe | 5,924 |
| Indonesia | 4,195 |
| Asia (excluding Malaysia & Indonesia) | 1,838 |
| Africa | 19 |
| Total | 27,345 |
Malaysia remains the largest contributor, but significant revenue streams from America and Europe highlight the company’s international reach and market diversification.
Financial Health: Balance Sheet Snapshot
Let’s look at the company’s financial position as at 31 March 2025, compared to 31 December 2024 (audited figures):
| Item | 31 March 2025 (RM’000) | 31 December 2024 (RM’000) | Change (RM’000) |
|---|---|---|---|
| Total Assets | 127,293 | 143,392 | (16,099) |
| Total Equity | 73,158 | 72,076 | 1,082 |
| Total Liabilities | 54,135 | 71,316 | (17,181) |
| Net Assets per ordinary share (sen) | 10.35 | 10.28 | 0.07 |
The Group’s total assets saw a decrease, primarily driven by a reduction in current assets, notably trade receivables (down from RM30.83 million to RM17.86 million) and a decrease in cash and bank balances. This reduction in receivables is generally a positive sign, indicating better cash collection. Simultaneously, total liabilities also saw a significant reduction, reflecting a decrease in trade payables, contract liabilities, and borrowings. This led to a slight increase in total equity and net assets per ordinary share, indicating an improvement in financial stability.
Cash Flow Performance
Cash flow is the lifeblood of any business. For Q1 2025:
- Net Cash from Operating Activities: A healthy RM1.90 million was generated from operations, which is a strong indicator of the core business’s ability to generate cash.
- Net Cash for Investing Activities: There was an outflow of RM0.27 million, mainly due to additions to fixed deposits and purchase of plant and equipment.
- Net Cash for Financing Activities: A significant outflow of RM5.85 million was recorded, primarily due to net repayments of bankers’ acceptances and hire purchase liabilities.
- Net Decrease in Cash and Cash Equivalents: Overall, cash and cash equivalents decreased by RM4.22 million during the quarter, ending at RM12.02 million. While there was a decrease in cash, the positive operating cash flow is encouraging.
Earnings Per Share (EPS)
The report provides two EPS figures, reflecting the pre- and post-IPO share capital:
- Basic EPS: 0.13 sen, calculated based on the 683,812,100 ordinary shares outstanding upon completion of the acquisition of PMI-Technology Sdn Bhd (PMIT Malaysia) but before the IPO.
- Diluted EPS: 0.10 sen, calculated based on the enlarged total number of issued shares (916,000,000 shares) after the IPO. This diluted figure provides a forward-looking perspective on earnings per share once the company is fully listed.
Risks and Prospects: Navigating the Future
Pan Merchant Berhad acknowledges the ongoing global uncertainties, including geopolitical tensions, renewed trade policy risks, and supply chain disruptions. However, the Group remains focused on its core competencies and is cautiously positive about its future prospects.
The company’s positive outlook is underpinned by:
- Resilient Global Demand: Sustained investment in key industries such as water and wastewater treatment, sustainable fuel refineries, and edible oil production continues to drive demand for solid liquid filtration equipment.
- Stable Order Book: The Group reports stable orders from its key markets in Asia, Europe, and America.
- Strategic Growth Initiatives: As outlined in their Prospectus, Pan Merchant Berhad plans to:
- Enhance Manufacturing Capabilities: Invest in machinery, equipment, tools, and plant renovations (RM28 million capital expenditure from IPO proceeds).
- Invest in Product Development: Allocate RM7 million from IPO proceeds to innovate and improve their offerings.
- Intensify Sales & Marketing: Expand geographical presence in Asia, America, Europe, and Africa, including participation in industry conferences like MINEX Kazakhstan 2025.
- Business Expansion: RM6 million from IPO proceeds is earmarked for this.
A significant event post-reporting period is the company’s Initial Public Offering (IPO) at an issue price of RM0.27 per share, raising RM62.69 million. These proceeds are crucial for funding their ambitious growth plans, including capital expenditure, product development, business expansion, and working capital.
Summary and Outlook
Pan Merchant Berhad’s first quarterly report as a public entity presents a picture of a company with a solid operational foundation and clear strategic ambitions. Despite the absence of comparative figures due to its recent public listing, the Q1 2025 performance, particularly the positive operating cash flow and dominant filtration solutions segment, provides a good baseline.
The company is strategically positioned in industries with resilient demand and is actively pursuing growth through enhanced manufacturing, product innovation, and market expansion. The successful IPO and the planned utilization of proceeds are pivotal to achieving these objectives.
Key points to monitor moving forward:
- The effective deployment of IPO proceeds into capital expenditure, product development, and business expansion.
- The ability to maintain positive operating cash flow and manage overall cash position as they execute their growth strategies.
- Performance in key geographical markets, especially as they intensify sales and marketing efforts globally.
- Any impact from global economic uncertainties on their order book and profitability.
My Take and Your Thoughts
From a professional standpoint, Pan Merchant Berhad appears to be starting its public journey on a stable footing. The positive operating cash flow in its first quarter is a healthy sign, suggesting that the core business is generating cash effectively, even as they manage significant repayments in their financing activities. The strategic allocation of IPO proceeds towards enhancing capabilities and market reach indicates a forward-looking management team.
However, as with any newly listed company, the true test will be their consistency in delivering on their stated plans and adapting to market dynamics in subsequent quarters. The lack of historical comparative data in this initial report means investors will be keenly watching their performance trends from Q2 2025 onwards.
What are your thoughts on Pan Merchant Berhad’s first quarterly report? Do you believe they can sustain this momentum and successfully execute their growth strategies in the coming years? Share your insights in the comments below!
