Hey there, fellow Malaysian investors! It’s time to dive into the latest financial performance of MERCURY SECURITIES GROUP BERHAD (MSGB) as they release their unaudited interim financial report for the second quarter ended 30 April 2025 (Q2 2025). This report offers a crucial glimpse into the company’s health and future trajectory in a dynamic market environment.
Overall, MSGB has demonstrated a robust performance in Q2 2025 and for the cumulative first half of the financial year, showcasing significant revenue and profit growth compared to the same periods last year. However, a closer look reveals some sequential deceleration from the immediate preceding quarter, which is worth noting. The company has also announced an interim dividend, reflecting its commitment to shareholder returns.
Let’s break down the numbers and insights that truly matter to understand MSGB’s current standing and future prospects.
Core Data Highlights: A Closer Look at the Numbers
MSGB’s financial results for Q2 2025 and the cumulative first half of the year highlight strong year-on-year growth, primarily driven by its core business segments. However, the sequential comparison with the immediate preceding quarter shows a dip, indicating some short-term fluctuations.
Quarterly Performance (Q2 2025 vs. Q2 2024)
In the second quarter of 2025, MSGB reported a substantial increase in its top and bottom lines:
Revenue: RM9.34 million
Compared to RM6.39 million in Q2 2024
An impressive increase of 46.12%
Profit Before Tax (PBT): RM4.72 million
Compared to RM3.97 million in Q2 2024
A solid increase of 18.75%
This growth was largely fueled by:
- Stockbroking Segment: Revenue soared by 49.32%, adding RM2.28 million.
- Corporate Finance Segment: Contributed an additional RM0.66 million, marking a 37.71% increase.
Despite the strong revenue growth, the gross profit margin slightly decreased from 60.96% in Q2 2024 to 55.37% in Q2 2025, and PBT margin also saw a reduction from 62.18% to 50.53%. This suggests that while business volume increased, the cost of services or operational expenses might have risen at a faster pace.
Year-to-Date Performance (6 Months Ended 30 April 2025 vs. 2024)
For the cumulative first six months of the financial year, MSGB continued its upward trend:
Total Revenue: RM19.45 million
Compared to RM14.31 million in the same period last year
A substantial increase of 35.86%
Profit Before Tax (PBT): RM10.01 million
Compared to RM8.79 million in the same period last year
A healthy increase of 13.80%
The Stockbroking Segment was the primary engine of this cumulative growth, contributing an additional RM5.08 million in revenue, a significant 48.50% increase, mainly from margin income, placement fees, and underwriting fees.
Sequential Quarter Performance (Q2 2025 vs. Q1 2025)
When comparing the current quarter (Q2 2025) to the immediate preceding quarter (Q1 2025), a different picture emerges:
Revenue: RM9.34 million
Compared to RM10.11 million in Q1 2025
A decline of 7.66%
Profit Before Tax (PBT): RM4.72 million
Compared to RM5.29 million in Q1 2025
A decrease of 10.77%
This sequential decline was primarily due to a lower contribution from the Stockbroking Segment. Gross profit also fell by 23.23%, and both gross profit and PBT margins saw a reduction.
Financial Health Snapshot (As at 30 April 2025)
MSGB’s balance sheet remains solid. Total assets increased to RM206.83 million from RM198.26 million as at 31 October 2024, reflecting growth in trade and other receivables. Total equity also grew to RM187.66 million from RM180.14 million, pushing Net Assets Per Share to 21.02 sen from 20.17 sen.
It’s worth noting that cash and cash equivalents saw a decrease from RM85.67 million to RM68.17 million. The cash flow statement indicates a net cash outflow from operating activities, largely due to an increase in trade and other receivables, which is typical for a growing financial services firm. The company also reported no borrowings, which is a positive sign of financial prudence.
Risk and Prospect Analysis: Navigating the Economic Landscape
The report provides valuable insights into the broader economic environment and MSGB’s strategic approach.
Malaysia’s Economic Outlook
Malaysia’s economy started 2025 on a strong note, with a 4.4% year-on-year GDP growth in Q1, driven by resilient domestic demand, investment activity, and a temporary export surge. However, Bank Negara Malaysia (BNM) is expected to revise its 2025 GDP projection downwards from the initial 4.5%-5.5% target, though still anticipating growth above 4%.
Key concerns include uncertainties in global trade, softening external demand, and volatile commodity markets. Despite these headwinds, BNM emphasizes Malaysia’s solid domestic fundamentals, with consumer spending, services, infrastructure projects, and tourism continuing to drive growth.
Monetary Policy and Market Opportunities
BNM has maintained the Overnight Policy Rate (OPR) at 3.00%, signaling a neutral and data-dependent monetary policy. The recent reduction in the Statutory Reserve Requirement (SRR) from 2% to 1% is seen as an operational liquidity measure rather than a monetary easing signal. These decisions reflect BNM’s cautious approach to support economic momentum while managing inflationary risks.
For investors, Malaysia presents a market of “selective opportunity.” Sectors such as Electrical & Electronics (E&E), furniture, rubber gloves, tourism, consumer goods, infrastructure, and financial services are highlighted as potential areas of upside. This is attributed to factors like trade diversion (from U.S.-China tensions), resilient domestic demand, and supportive government policies.
MSGB’s Strategic Stance
In light of the ongoing U.S.-China global trade policy tensions and general market uncertainties, MSGB’s Board remains vigilant. They are “cautiously optimistic” that the trading conditions and corporate activities will not materially affect the Group’s performance in the current financial year. This indicates a proactive and adaptive management approach to potential market shifts.
Utilisation of IPO Proceeds
MSGB has made significant progress in utilizing its IPO proceeds of RM39.27 million. As of 30 April 2025, RM37.36 million has been utilized for margin financing facilities, digitalization programs, marketing activities, and listing expenses. The remaining unutilized balance of RM1.91 million, initially earmarked for working capital and other group operations, has had its utilization timeframe extended by another 12 months, from 18 March 2025 to 18 March 2026. This unutilized amount is currently placed with financial institutions to earn interest income, demonstrating prudent cash management.
Summary and Outlook
Summary and Investment Recommendations
MERCURY SECURITIES GROUP BERHAD’s Q2 2025 report demonstrates a strong year-on-year growth trajectory, particularly in its core Stockbroking and Corporate Finance segments. The cumulative first-half results further solidify this positive trend. While the sequential decline from the immediate preceding quarter suggests some volatility, it’s important to consider the dynamic nature of the financial services industry.
The company’s healthy balance sheet, increasing net assets per share, and absence of borrowings underscore its financial stability. The management’s cautious yet optimistic outlook, coupled with their strategic approach to navigate global economic uncertainties, indicates a well-managed entity.
Key positive factors from this report include:
- Significant year-on-year revenue and profit growth.
- Strong contributions from both Stockbroking and Corporate Finance segments.
- Healthy financial position with increasing total assets and equity.
- Prudent management of IPO proceeds and no outstanding borrowings.
- Declaration of an interim dividend, signaling commitment to shareholder returns.
Looking ahead, while global trade tensions and external demand remain areas of concern, Malaysia’s resilient domestic demand and selective market opportunities could provide a supportive backdrop for MSGB’s continued operations. The company’s focus on its core businesses and adaptability to market conditions will be key to sustaining its performance.
Final Thoughts and Engagement
From a professional standpoint, MSGB’s report paints a picture of a growing company that is navigating a complex economic landscape with a measured approach. The year-on-year growth is commendable, reflecting effective business strategies. The sequential dip, while noticeable, could be a normal market fluctuation or a strategic recalibration, and it will be interesting to see how the company performs in the next quarter.
The dividend declaration is a positive signal to shareholders, demonstrating confidence in future earnings. The extension of the IPO proceeds utilization timeframe also suggests careful planning rather than rushed deployment.
What are your thoughts on MERCURY SECURITIES GROUP BERHAD’s latest performance? Do you think the company can maintain this growth momentum in the next few years amidst the global uncertainties? Share your views in the comments section below!
