Haily Group Berhad’s Q1 2025: A Strong Start Driven by Construction Momentum
Greetings, fellow investors and market watchers! Today, we’re diving deep into the latest financial performance of Haily Group Berhad, a prominent Malaysian construction company, for its first quarter ended 31 March 2025. The report paints a picture of robust growth and strategic execution, highlighting the company’s ability to capitalize on ongoing projects and a buoyant construction sector.
What immediately stands out is the significant surge in both revenue and profit, underscoring a strong start to the financial year. This performance, coupled with a healthy balance sheet and a dividend announcement, offers a compelling narrative for Malaysian retail investors looking at the local market dynamics. Let’s unpack the details!
Key Financial Highlights: Surging Revenue and Profits
Haily Group Berhad has delivered an impressive first quarter, demonstrating considerable financial strength. The company’s top-line revenue saw a substantial increase, translating into even stronger profit growth. This indicates not only a higher volume of work but also an improved operational efficiency.
Q1 2025 Performance
Revenue: RM95.85 million
Gross Profit: RM9.40 million
Profit Before Tax: RM4.21 million
Profit After Tax: RM2.91 million
Earnings Per Share: 0.69 sen
Compared to Q1 2024
Revenue: RM72.11 million (+32.92%)
Gross Profit: RM6.29 million (+49.38%)
Profit Before Tax: RM2.15 million (+95.26%)
Profit After Tax: RM1.53 million (+90.45%)
Earnings Per Share: 0.43 sen
The 32.92% jump in revenue to RM95.85 million for Q1 2025, compared to RM72.11 million in the same period last year, is primarily a testament to the Group’s robust building construction segment. This segment alone saw its revenue climb by 32.68% to RM95.51 million.
What’s particularly encouraging is the even sharper increase in profitability. Gross profit soared by 49.38%, driven by an improved gross profit margin of 9.81% (up from 8.73% in Q1 2024). This margin expansion is attributed to contributions from higher-margin construction projects undertaken during the quarter.
Consequently, profit before tax nearly doubled, rising by 95.26% to RM4.21 million, and profit after tax followed suit with a 90.45% increase to RM2.91 million. This strong bottom-line growth is a clear indicator of efficient project management and cost control.
Segmental Performance: Construction Leads the Way
Haily Group’s core strength lies in its building construction segment, which continues to be the primary revenue driver. The report highlights several ongoing projects that significantly contributed to this quarter’s stellar performance.
- New ongoing projects like the 220 DSTH Bandar Jaya Putra, 332 DSTH Gelang Patah, and 393 DSTH Meridin East – Parcels 4A3, 4A4 & 4A5 Project, contributed approximately RM65.01 million in revenue.
- Increased percentage of completion on existing projects such as the 76 DSCH Taman Impian Emas Project and 120 DSCH Bandar Putra Project added another RM13.68 million.
While some ongoing projects saw a reduction in their percentage of completion recognised, leading to an offset of approximately RM55.28 million, the overall net effect was a significant positive surge in the building construction segment.
The “Others” segment, which includes civil engineering works, machinery rental, and agricultural activities, also saw a substantial increase in revenue, albeit from a smaller base, growing by 167.72% to RM340k.
Quarter-on-Quarter Momentum
Comparing the current quarter with the immediate preceding quarter (Q4 2024) further reinforces Haily Group’s positive trajectory.
Q1 2025 Performance
Revenue: RM95.85 million
Gross Profit: RM9.40 million
Profit Before Tax: RM4.21 million
Profit After Tax: RM2.91 million
Compared to Q4 2024
Revenue: RM81.29 million (+17.91%)
Gross Profit: RM8.42 million (+11.70%)
Profit Before Tax: RM3.58 million (+17.52%)
Profit After Tax: RM2.47 million (+17.89%)
The 17.91% increase in revenue from Q4 2024 to Q1 2025 indicates sustained construction activity and progress on ongoing projects. Although the gross profit margin for Q1 2025 was slightly lower than Q4 2024 (9.81% vs 10.35%, due to year-end adjustments in Q4), the significant revenue growth still led to an 11.70% increase in gross profit, and a healthy rise in both profit before tax and profit after tax.
Financial Health: A Solid Foundation
Beyond the income statement, Haily Group’s balance sheet and cash flow statement also present a picture of financial stability.
Balance Sheet Snapshot (as at 31 March 2025)
| Metric | 31 March 2025 (RM’000) | 31 December 2024 (RM’000) |
|---|---|---|
| Total Assets | 238,053 | 232,423 |
| Total Equity | 111,261 | 108,349 |
| Total Liabilities | 126,792 | 124,074 |
| Net Assets per Share (RM) | 0.26 | 0.26 |
The company maintains a strong asset base, with total assets increasing to RM238.05 million. Shareholder’s equity also saw a healthy increase to RM111.26 million, reflecting the retained earnings from the profitable quarter.
Cash Flow Strength
A notable improvement was seen in cash flow from operating activities, which turned positive at RM2.51 million for Q1 2025, a significant turnaround from a negative RM1.95 million in Q1 2024. This indicates the company is generating healthy cash from its core business operations. Cash and cash equivalents at the end of the period stood at RM19.11 million, up from RM6.24 million in the prior year’s corresponding quarter.
Furthermore, total borrowings decreased from RM13.85 million as at 31 December 2024 to RM9.73 million as at 31 March 2025, reflecting a proactive approach to managing debt and strengthening the financial position.
Industry Outlook and Company Prospects
Haily Group’s performance is intrinsically linked to the broader Malaysian economy and, more specifically, the construction sector. The report provides valuable insights into these areas:
Malaysian Economic Overview
The Malaysian economy expanded by 4.4% in Q1 2025, primarily driven by steady domestic demand, robust household spending, and sustained investment activities. While external risks, particularly from evolving trade tariffs, might slightly temper the earlier forecast of 4.5% – 5.5% growth for 2025, resilient domestic demand is expected to provide a strong buffer. Continued wage and employment growth, alongside multi-year infrastructure projects and the realization of approved investments, are set to anchor future growth.
Construction Sector Outlook
The construction sector itself showed strong growth, soaring by 16.6% in Q1 2025, with a work done value of RM42.9 billion. Johor, where Haily Group primarily operates, is a key contributor, ranking second nationally with an 18.0% share of the work done value.
The sector is forecast to grow by 9.4% in 2025, propelled by strategic infrastructure projects like LRT3 Phase 2 and Sarawak-Sabah Link Road Phase 2. Demand for non-residential buildings, especially industrial facilities in areas like the Johor-Singapore Special Economic Zone (JS-SEZ), and sustained demand for affordable housing, are expected to further drive expansion.
Haily Group’s Strategic Focus
Against this backdrop, Haily Group remains cautiously optimistic about the continuing demand for its building construction services, particularly in Johor. With over 17 years of track record, the company plans to:
- Continue focusing on its core competency in building construction in Johor.
- Leverage its experience to expand into other districts within Johor.
- Focus on residential, commercial, and industrial building projects.
- Actively tender for new projects as opportunities arise.
The company’s future performance is expected to be continuously driven by its ability to successfully complete its ongoing construction projects.
Dividends: Returning Value to Shareholders
Haily Group has also demonstrated its commitment to shareholder returns. The company declared a second interim single tier dividend of 0.33 sen per ordinary share for the financial year ended 31 December 2024. This dividend, amounting to RM1.40 million, was declared on 26 March 2025 and paid on 16 May 2025.
Summary and
Haily Group Berhad’s Q1 2025 report is undoubtedly strong, marked by significant revenue and profit growth, healthy cash flow generation, and a solid financial position. The company’s core building construction segment is performing exceptionally well, capitalizing on an active construction market, particularly in Johor. The cautious optimism expressed by the management, backed by strategic focus on its core competencies and geographical strength, suggests a positive outlook for the remainder of the financial year.
While the overall picture is positive, it’s important for investors to consider potential factors that could influence future performance:
- Economic Headwinds: The broader Malaysian economy, while resilient, faces external risks from global trade dynamics and tariffs, which could indirectly affect the construction sector.
- Project Execution Risk: The company’s continued success is heavily reliant on its ability to efficiently and profitably complete its ongoing and future projects. Delays or cost overruns could impact earnings.
- Competition: The construction sector is competitive. Haily Group’s ability to secure new high-margin projects will be crucial for sustained growth.
Overall, Haily Group appears to be on a solid footing, benefiting from a supportive industry environment and effective operational management. Their commitment to returning value to shareholders through dividends is also a positive sign.
What are your thoughts on Haily Group’s latest performance? Do you believe the current momentum in the construction sector, especially in Johor, will continue to drive their growth in the coming quarters? Share your insights in the comments below!
Stay tuned for more in-depth analyses of Malaysian companies and market trends. Happy investing!
