Fintec Global Berhad Q3 FY2025: Navigating Market Headwinds Amidst Strategic Shifts
Greetings, fellow investors! Today, we’re diving deep into Fintec Global Berhad’s latest unaudited condensed consolidated financial statements for the third quarter and period ended 31 March 2025. This report offers a crucial glimpse into the company’s performance, revealing significant challenges, particularly in its investment portfolio, alongside strategic adjustments aimed at future resilience. While the numbers reflect a tough quarter, Fintec Global is actively repositioning itself, making this report a must-read for anyone tracking its journey.
Core Data Highlights: A Challenging Quarter
Quarterly Performance (Q3 FY2025 vs Q3 FY2024)
The third quarter of the financial year 2025 proved challenging for Fintec Global. The company reported a substantial decline in revenue and a widening of losses compared to the same period last year.
Q3 FY2025
Revenue: RM2,690k
Loss Before Tax: RM(25,159)k
Net Loss Attributable to Owners: RM(25,144)k
Basic Loss Per Share: (12.61) sen
Q3 FY2024
Revenue: RM16,131k
Loss Before Tax: RM(8,616)k
Net Loss Attributable to Owners: RM(8,298)k
Basic Loss Per Share: (0.14) sen
Revenue plummeted by 83.3%, primarily due to decreased transactions in the sales of marketable securities. This significant drop directly impacted profitability, with the loss before tax widening by 192.0% and net loss attributable to equity holders increasing by 203.0%. The main culprits behind the higher losses were a substantial mark-to-market loss of RM21.65 million on marketable securities (compared to RM6.5 million in the prior year’s corresponding quarter) and an unrealized foreign exchange loss of RM0.29 million (against a gain of RM0.88 million previously).
Year-to-Date Performance (9M FY2025 vs 9M FY2024)
The year-to-date performance mirrors the quarterly trend, indicating a consistent period of headwinds for Fintec Global.
9M FY2025
Revenue: RM3,899k
Loss Before Tax: RM(37,964)k
Net Loss Attributable to Owners: RM(37,848)k
Basic Loss Per Share: (18.73) sen
9M FY2024
Revenue: RM22,522k
Profit Before Tax: RM8,904k
Net Profit Attributable to Owners: RM9,493k
Basic Earnings Per Share: 0.16 sen
For the nine months ended 31 March 2025, revenue decreased by 82.7%, largely due to a RM18.98 million reduction in marketable securities sales. The group transitioned from a profit before tax of RM8.90 million in the previous year’s period to a loss before tax of RM37.96 million. This shift was primarily driven by a significant mark-to-market loss of RM28.25 million on marketable securities (compared to a RM14.68 million profit previously) and an unrealized foreign exchange loss of RM1.82 million (versus a gain of RM0.35 million last year).
Segmental Performance Review (Year-to-Date)
A closer look at Fintec Global’s business segments reveals varied performances, reflecting the company’s strategic adjustments and market dynamics:
| Segment | Revenue 9M FY2025 (RM’000) | Revenue 9M FY2024 (RM’000) | Change (%) | PBT 9M FY2025 (RM’000) | PBT 9M FY2024 (RM’000) | Change (%) |
|---|---|---|---|---|---|---|
| Portfolio Investment | 2,674 | 21,654 | (88%) | (25,120) | 16,205 | (255%) |
| Biotechnology Products | 0 | 370 | (100%) | (78) | (671) | 88% |
| Financial Services | 1,165 | 97 | 1,101% | 61 | 9 | 586% |
| Glove Business | 60 | 401 | (85%) | (3,864) | (4,901) | 21% |
- Portfolio Investment: This segment, heavily influenced by marketable securities, saw its revenue decline by 88% and shifted from a profit to a significant loss due to the aforementioned mark-to-market losses and foreign exchange fluctuations.
- Biotechnology Products: Operations in this segment have ceased, leading to a 100% drop in revenue. The reduced loss before tax reflects the cessation of activities, with remaining losses attributed to administrative expenses.
- Financial Services: A standout performer, this segment recorded an impressive 1,101% increase in revenue and a 586% jump in profit before tax. This growth is primarily attributed to a substantial increase in loan balances, from RM1.64 million to RM10 million.
- Glove Business: While revenue decreased by 85%, the segment managed to reduce its loss before tax by 21%, mainly due to lower operating expenses in North America. The report notes that the company is cautiously exploring new market opportunities for its Medela gloves.
Financial Position: Balance Sheet & Cash Flow
Fintec Global’s balance sheet reflects the impact of the period’s losses and strategic financing activities.
As at 31 March 2025
Total Assets: RM213,895k
Total Liabilities: RM15,904k
Net Assets Per Share: RM0.98
As at 30 June 2024
Total Assets: RM240,825k
Total Liabilities: RM5,988k
Net Assets Per Share: RM1.20
Total assets decreased by 11% (RM26.93 million), primarily due to fair value losses on marketable securities and depreciation. Conversely, total liabilities surged by 166% (RM9.92 million), largely driven by the issuance of RM10 million in redeemable non-convertible preference shares by Fintec Capital Sdn. Bhd., a wholly-owned subsidiary, to finance new loan disbursements.
From a cash flow perspective, the company utilized more cash in operating activities (RM13.06 million compared to RM10.58 million last year). However, financing activities generated a significant positive cash flow of RM10.97 million, a stark contrast to the RM0.12 million used in the prior period, due to the aforementioned preference share issuance.
Prospects and Strategic Outlook
Despite the current challenges, Fintec Global remains focused on its strategic direction and future prospects. The company acknowledges that its performance is heavily influenced by investments in marketable securities, which are subject to unpredictable market forces. However, it maintains a cautious yet strategic approach, expressing optimism that its incubatees will perform better as market conditions recover.
A key strategy involves diversifying its investment portfolio by exploring opportunities in sectors that offer collaboration potential and cross-selling synergies. This proactive approach aims to mitigate downside risks and provide more stable returns for shareholders.
In the glove business, the global surge in influenza and respiratory illnesses has positively influenced market sentiment, prompting distributors to stockpile inventories and improving glove demand. While not expected to escalate into a pandemic-level surge, this trend highlights the potential for long-term growth in the nitrile glove industrial segment. Fintec Global plans to cautiously explore new market opportunities and continue to market its Medela gloves to capitalize on this renewed interest.
Summary and
Fintec Global Berhad’s Q3 FY2025 report highlights a period of significant financial contraction, primarily driven by substantial mark-to-market losses on its investment portfolio and a sharp decline in revenue from marketable securities transactions. While the overall financial performance for the quarter and year-to-date shows widening losses, it’s crucial to acknowledge the underlying strategic movements within the company.
The financial services segment stands out with impressive growth, demonstrating the potential of its lending activities. The strategic decision to cease operations in the biotechnology segment, while leading to a complete revenue halt, has also contributed to a reduction in segment losses, indicating a move towards operational efficiency and resource reallocation. Furthermore, the company’s efforts to manage costs in the glove business, despite revenue declines, show a commitment to streamlining operations.
Fintec Global’s forward-looking statements emphasize a cautious yet optimistic outlook, banking on market recovery for its incubatees and active diversification of its investment portfolio. The positive sentiment in the glove sector, albeit modest, also presents a potential avenue for future improvement. The recent capital reduction exercise and the issuance of redeemable preference shares are significant financial maneuvers that aim to strengthen the company’s capital structure and provide funding for growth, particularly in its financial services arm.
However, potential investors should be mindful of the following key points:
- The company’s profitability is highly susceptible to the volatility of marketable securities, as evidenced by the substantial fair value losses in this period.
- Unrealized foreign exchange fluctuations also significantly impact the bottom line, adding another layer of market risk.
- While diversification is a stated strategy, the current heavy reliance on the performance of its investment portfolio remains a dominant factor.
- The overall negative financial performance indicates that the company is still in a challenging phase, requiring sustained strategic execution to return to profitability.
The path ahead for Fintec Global appears to be one of strategic recalibration and cautious optimism. The management’s focus on diversifying investments and leveraging opportunities in segments like financial services and the recovering glove market will be critical in navigating the unpredictable economic landscape.
What are your thoughts on Fintec Global Berhad’s latest financial results? Do you believe their strategic shifts and diversification efforts will be enough to turn the tide in the coming quarters? Share your insights and perspectives in the comments below!
