Cuckoo International’s Q1 2025 Flight: A Strong Start and IPO Readiness
Greetings, fellow investors and market enthusiasts! Today, we’re diving into the unaudited interim financial report for the first quarter ended 31 March 2025, from Cuckoo International (MAL) Berhad. This report marks a significant milestone as it’s the company’s inaugural interim financial disclosure, setting the stage for its upcoming listing on the Main Market of Bursa Malaysia Securities Berhad.
While this being their first interim report means we don’t have direct comparative figures for the same period last year (Q1 2024), the numbers for Q1 2025 paint a picture of a company with a solid foundation and clear strategic direction, especially as it prepares for its highly anticipated IPO.
Key Financial Highlights from Q1 2025
Cuckoo International has kicked off 2025 with a commendable performance. Let’s look at the core figures:
Q1 2025 Performance
- Revenue: RM296.275 million
- Gross Profit: RM91.965 million
- Profit Before Tax (PBT): RM38.062 million
- Profit for the Period: RM27.820 million
- Basic/Diluted Earnings Per Share (EPS): 2.16 sen
Q1 2024 Performance
As this is the Company’s first interim financial report, comparative figures for the preceding corresponding quarter (31 March 2024) are not available.
The Group achieved a gross profit margin of 31.0% for the quarter, reflecting efficient cost management relative to its revenue. The profit for the period of RM27.820 million translates to a basic earnings per share of 2.16 sen, a robust start for the year.
Revenue Breakdown by Segment
The company’s revenue streams are primarily driven by two segments:
| Segment | Revenue (RM’000) | Contribution to Total Revenue |
|---|---|---|
| CUCKOO-Branded products | 237,049 | 80.0% |
| CUCKOO Co-Created products | 58,349 | 19.7% |
| Non-reportable segments | 877 | 0.3% |
| Total | 296,275 | 100.0% |
The CUCKOO-Branded segment remains the dominant contributor, underscoring the strength and market acceptance of its core product offerings.
Financial Health and Cash Flow Snapshot
Looking at the balance sheet as of 31 March 2025, the company’s total assets stood at RM1,504.060 million, showing a slight increase from RM1,481.686 million at 31 December 2024. Equity attributable to owners of the Company also saw a healthy rise to RM883.226 million from RM855.462 million.
From a cash flow perspective, the Group recorded net cash used in operating activities of RM30.565 million for the quarter. This was primarily influenced by changes in working capital, notably an increase in trade and other receivables and prepayments. However, financing activities provided a net cash inflow of RM2.075 million, largely due to drawdown of loans and borrowings, offsetting some repayments and interest costs.
Cash and cash equivalents at the end of the quarter were RM41.739 million.
Strategic Outlook and Future Trajectory
Cuckoo International’s report clearly outlines its ambitious plans for market expansion and operational enhancement. The company remains committed to leveraging its strong brand presence and omni-channel distribution network to increase its market share. Key strategic initiatives include:
- Product and Service Expansion: Increasing product SKUs and home care service offerings to cater to a broader range of consumer needs.
- Distribution Network Strengthening: Expanding its omni-channel distribution network across Malaysia and Singapore, including the introduction of CUCKOO “cash and carry” Brandshops and enhanced e-commerce platform availability.
- Sales Force Growth: Recruiting additional sales personnel to support continued growth.
- Operational Efficiency: Investing in logistics capabilities, warehouse management, and upgrading data servers to serve a larger customer base and streamline operations.
A notable item affecting profit before tax for the quarter was net losses on impairment of financial instruments amounting to RM12.544 million, mainly from trade receivables and net investment in lease. While this impacted the bottom line, it’s a non-cash item reflecting a prudent assessment of potential credit risks.
The IPO Journey
A significant development highlighted in the report is the company’s Initial Public Offering (IPO). Cuckoo International issued its prospectus on 26 March 2025, with the final price per share fixed at RM1.08 on 11 June 2025. The IPO is set to raise gross proceeds of RM154.7 million, with listing expected on 24 June 2025.
The utilisation of these proceeds is strategically planned to fuel the company’s growth:
| Utilisation of Proceeds | Amount (RM’mil) | % | Estimated Timeframe |
|---|---|---|---|
| Capital to fund product purchases for expansion of rental business | 75.3 | 48.7% | Within 12 months |
| Repayment of bank borrowings | 40.0 | 25.8% | Within 9 months |
| Capital expenditure (Brandshops & IT systems) | 10.6 | 6.8% | Within 24 months |
| Expansion of CUCKOO Singapore | 10.0 | 6.5% | Within 24 months |
| Estimated listing expenses | 18.8 | 12.2% | Immediate |
| Total | 154.7 | 100.0% |
This strategic allocation underscores the company’s focus on expanding its core business, enhancing operational capabilities, and strengthening its regional presence.
Summary and Outlook
Cuckoo International’s Q1 2025 report demonstrates a promising start to the year, marked by solid revenue generation and profitability. Despite being its first interim report without prior year comparatives, the figures present a healthy operational performance. The company’s focus on expanding its product range, strengthening its distribution network, and investing in operational efficiency positions it well for future growth.
The upcoming IPO is a pivotal moment, with the substantial proceeds earmarked for strategic investments that align with the Group’s long-term vision. The management’s confidence is underpinned by strong consumer demand, a resilient rental business model, and continued investment in technology and infrastructure, capitalising on the growing trend of healthy living through home appliances.
Key areas to observe moving forward include:
- The successful execution of its IPO and the effective utilisation of the raised proceeds as planned.
- The impact of expanding CUCKOO “cash and carry” Brandshops and e-commerce presence on sales growth.
- The effectiveness of investments in logistics and IT systems in enhancing operational efficiency and scalability.
- The performance of the CUCKOO Co-Created segment and its contribution to overall revenue diversification.
- The ability to manage and mitigate financial instrument impairments in future periods.
Overall, Cuckoo International appears to be on a clear path, leveraging its brand strength and strategic initiatives to capture opportunities in the home appliance market. The journey ahead, especially post-IPO, will be interesting to watch.
What are your thoughts on Cuckoo International’s Q1 performance and its IPO strategy? Do you believe the company can sustain this growth momentum and effectively deploy its IPO proceeds to solidify its market position? Share your insights in the comments below!
