“`html
Sanichi Q4 2025: Revenue Climbs, But Profits Remain Elusive. What’s Next?
Sanichi Technology Berhad has just released its financial results for the fourth quarter ended March 31, 2025. The report presents a mixed picture: while the company saw a significant jump in revenue, it also recorded wider losses, leaving investors with much to consider.
In this analysis, we’ll break down the key figures, explore the performance of its business segments, and examine the risks and prospects outlined by the management. Let’s dive in to understand what’s driving these numbers.
A Quarter of Contrasts: Revenue Up, Profits Down
The most striking aspect of this quarter’s report is the divergence between top-line growth and bottom-line performance. Compared to the immediate preceding quarter (ended December 31, 2024), Sanichi’s revenue saw a healthy increase, primarily driven by its property development division.
However, this revenue growth did not translate into profitability. In fact, the company’s losses deepened, as the cost of sales surpassed the revenue generated, leading to a gross loss even before accounting for other operating expenses.
Q4 2025 (Current Quarter)
Revenue: RM7.76 million
Loss Before Tax (LBT): RM7.20 million
Loss After Tax (LAT): RM6.92 million
Q3 2025 (Preceding Quarter)
Revenue: RM5.48 million
Loss Before Tax (LBT): RM3.60 million
Loss After Tax (LAT): RM3.90 million
The 41.5% quarter-on-quarter revenue increase is a positive signal, but the widening loss before tax highlights persistent cost pressures and operational challenges within the Group.
Dissecting the Business: A Look at Segment Performance
To get a clearer picture, let’s look at the performance of Sanichi’s main business segments for the full financial year ended March 31, 2025. The data reveals where the revenue is coming from and which areas are weighing on profitability.
| Business Segment | Full-Year Revenue (RM’000) | Full-Year Loss from Operations (RM’000) |
|---|---|---|
| Property Development | 9,819 | (3,776) |
| Precision Mould | 5,933 | (5,253) |
| Investment Holding | 1,241 | (8,491) |
The Property Development segment was the largest revenue contributor but still posted an operating loss. The Precision Mould business, a traditional core for the company, faced significant headwinds, recording a substantial loss. Meanwhile, the Investment Holding segment also contributed heavily to the overall operational losses.
Under the Hood: Sanichi’s Financial Position
A look at the balance sheet shows a decrease in total assets, liabilities, and equity compared to the previous year. The Group’s cash and cash equivalents also declined from RM93.87 million to RM76.24 million.
One figure that stands out is the Net Assets (NA) per share, which surged to RM1.45 from RM0.18 in the previous year. It’s important for investors to understand that this dramatic increase is not due to improved operational performance. Instead, it is the result of recent corporate exercises, including a 10-to-1 share consolidation and a capital reduction exercise that offset accumulated losses. These are accounting adjustments rather than a reflection of fundamental business growth.
Navigating Choppy Waters: Risks and Future Outlook
The management has acknowledged that the business environment remains challenging. They have identified several key risks and strategic points for the upcoming financial year:
- Foreign Exchange Volatility: The tooling business, which has significant overseas revenue, continues to be exposed to currency fluctuations.
- Market Downturn: A weak market sentiment could negatively impact the fair value of the Group’s financial assets and investments.
- Strategic Bright Spots: Management is optimistic that the completion of the Marina Point Melaka property development project will strengthen the Group’s financial health. Past corporate exercises, such as share issuances, have also bolstered its capital base.
The Group plans to cautiously navigate this uncertain market while actively exploring new business opportunities.
Summary and Investment Recommendations
This section provides a summary of the financial report and our perspective. It is crucial to note that this is not investment advice. All investors should conduct their own due diligence and consult with a professional financial advisor before making any investment decisions.
Sanichi’s latest report is a tale of two stories. On one hand, the revenue growth from its property development arm is a positive development. On the other, the inability to control costs and achieve profitability across its core segments is a major concern. The company’s future performance appears heavily reliant on the successful execution and sale of its Marina Point project. While corporate exercises have tidied up the balance sheet, the fundamental challenge of turning revenue into profit remains.
Key risks for investors to monitor include:
- Persistent Operational Losses: The company continues to post losses at the gross and operating levels, indicating that its core business operations are not yet profitable.
- Foreign Exchange Exposure: The precision mould segment’s performance is susceptible to volatility in foreign currency markets.
- Market-Dependent Investments: The value of the Group’s investments is tied to market conditions, which are currently described as uncertain and trending downwards.
Final Thoughts
From my perspective, while the revenue growth from the property segment is encouraging, the core profitability issue remains the central challenge for Sanichi. The company is in a transitional phase, and the successful completion and sales of the Marina Point project will be a key catalyst to watch. Investors should keep a close eye on the company’s ability to manage its costs and convert its development projects into tangible profits.
What are your thoughts on Sanichi’s strategy? Do you believe the property development arm can steer the company back to profitability?
Share your views in the comments below!
“`
