Sasbadi’s Q3 FY2025 Report: Revenue Soars, But Are Rising Costs a Concern?
Sasbadi Holdings Berhad, a prominent name in Malaysia’s educational publishing scene, has just released its third-quarter results for the financial year ending August 31, 2025. The report reveals a story of robust top-line growth and impressive year-to-date profitability, highlighted by a massive 292% surge in quarterly net profit for shareholders. However, a closer look reveals that while sales are booming, rising operational costs are beginning to apply pressure on margins. Let’s dive deep into the numbers and what they mean for the company’s future.
Core Financial Performance: A Tale of Two Metrics
In the third quarter ended May 31, 2025, Sasbadi demonstrated strong sales momentum. The company’s performance when compared to the same period last year shows significant growth, primarily driven by its core print publishing division.
Q3 FY2025 (Current Quarter)
Revenue: RM21.51 million
Profit Before Tax: RM0.92 million
Net Profit (Owners): RM0.96 million
Basic EPS: 0.23 sen
Q3 FY2024 (Comparative Quarter)
Revenue: RM15.97 million
Profit Before Tax: RM1.02 million
Net Profit (Owners): RM0.25 million
Basic EPS: 0.06 sen
The 34.72% year-on-year increase in quarterly revenue is impressive, attributed to higher sales of academic products. However, the Profit Before Tax (PBT) saw a slight dip of 9.25%. The company explains this was due to higher operating costs and a loss incurred by its newly acquired subsidiary, Edu Paper and Stationery Sdn Bhd (EPSSB), which experienced a seasonally weak quarter.
Looking at the bigger picture, the nine-month year-to-date performance is exceptionally strong:
- Year-to-Date Revenue: Increased by a remarkable 46.89% to RM97.30 million from RM66.24 million last year. This was boosted by strong retail sales, orders for the new school year, and the successful Madani Book Voucher program in late 2024.
- Year-to-Date Profit Before Tax: More than doubled, soaring by 110.84% to RM20.39 million from RM9.67 million, showcasing the powerful impact of the revenue growth.
Deep Dive into Business Segments
Sasbadi’s business is diversified across several educational segments. The Print Publishing division remains the cornerstone of its operations and the primary driver of revenue this quarter.
| Business Segment | Revenue Q3 2025 (RM’000) | Revenue Q3 2024 (RM’000) |
|---|---|---|
| Print Publishing | 20,135 | 14,142 |
| Digital & Network Marketing | 1,123 | 1,617 |
| Applied Learning Products (ALP/STEM) | 253 | 208 |
The Print Publishing division’s revenue surged by over 42% year-on-year, underscoring continued strong demand for its academic materials. The acquisition of a 60% stake in EPSSB, completed on March 1, 2025, marks a strategic expansion into the paper-based stationery market, although it posted an initial loss in its first quarter under the Group.
Risks and Future Prospects: AI, Vouchers, and Rising Costs
Sasbadi is not just relying on its traditional strengths; it is actively pursuing future growth avenues while navigating current economic headwinds.
Opportunities on the Horizon
- MADANI Teachers’ Book Voucher: A significant catalyst is the new book voucher initiative for about 445,000 teachers, translating to a RM44.5 million market opportunity. Sasbadi is strategically positioned to capture a slice of this pie by publishing exclusive titles focused on teacher upskilling, particularly in areas like Artificial Intelligence (AI).
- AI in Education: The company’s collaboration with Agmo Holdings Berhad to develop a proprietary Large Language Model (LLM) tailored for the Malaysian curriculum is a forward-thinking move. This aligns perfectly with the Ministry of Education’s Digital Education Policy and could become an invaluable tool for AI-powered classrooms.
- Market Expansion: The company is implementing strategies to grow the market for its new subsidiary, EPSSB, to mitigate seasonal sales patterns and create a new revenue stream.
Navigating the Challenges
- Operating Costs: The report openly acknowledges the pressure from rising costs, partly due to policy changes like the new minimum wage introduced in Budget 2025. This directly impacts profitability, as seen in the slight PBT decline this quarter.
- Seasonality: The education business is inherently seasonal, with sales peaking before the start of a new school year. The company is actively working to reduce this dependency by growing its non-academic and digital segments.
Summary and Outlook
Sasbadi’s Q3 2025 results paint a picture of a company in a strong growth phase, successfully leveraging its brand and market position to drive substantial revenue increases. The impressive year-to-date profit growth highlights the effectiveness of its sales strategies, including capitalizing on government initiatives. However, investors should note the emerging challenge of rising operating costs, which slightly eroded quarterly profits despite higher sales. The company’s strategic ventures into AI with its LLM project and the expansion into stationery via EPSSB are promising long-term initiatives that could diversify revenue and fuel future growth. The upcoming MADANI Teachers’ Book Voucher program presents a clear, immediate opportunity. Sasbadi appears cautiously optimistic, balancing its growth ambitions with prudent management of economic headwinds. This content is for informational purposes only and does not constitute any investment advice.
Key points to monitor moving forward:
- Margin Management: How effectively the company can manage rising operating costs to protect its profitability in the coming quarters.
- Subsidiary Performance: The progress of integrating EPSSB and turning it into a profitable contributor to the Group.
- Digital and AI Initiatives: The development and future commercialisation of the Large Language Model (LLM) and its adoption within the education sector.
- Execution on Vouchers: The company’s ability to successfully capture a significant share of the MADANI Teachers’ Book Voucher program.
Final Thoughts from the Blogger
From a professional standpoint, Sasbadi is making commendable strategic moves. While many traditional publishers are struggling, Sasbadi is proactively embracing digital transformation with its AI-driven LLM project. This isn’t just a buzzword; it’s a tangible step towards future-proofing its business model. The ability to capitalise on government initiatives like the book vouchers further demonstrates its market agility. The key challenge remains internal: controlling costs in an inflationary environment. If they can maintain this balance, their growth story looks set to continue.
What are your thoughts on Sasbadi’s strategy? Do you think their push into AI will be a game-changer for the education sector? Share your views in the comments below!
