Chasen Holdings Limited Financial Analysis: Strong Net Profit Growth

Business Description

Chasen Holdings Limited is a Singapore-incorporated company (Registration Number: 199906814G) with its principal place of business at 6 Tuas Avenue 20, Singapore. The company operates through three main business segments:

• Specialist Relocation Solutions: Providing specialist manpower and equipment for relocating machinery and equipment within and across countries, including cleanroom environments and customized packaging.
• Third Party Logistics: Offering packaging, trucking, distribution, freight forwarding, warehousing, and cargo management services.
• Technical & Engineering: Engaging in design, fabrication, installation of steel structures, mechanical and electrical installations, engineering services, and more.

The company operates in multiple geographic regions, including Singapore, PRC, Malaysia, USA, Vietnam, Thailand, and India.

Industry Position and Competitive Landscape

Chasen Holdings Limited is positioned as a diversified service provider within the logistics and engineering sectors. It faces competition from other logistics and engineering service providers in the regions it operates. The company’s market share is bolstered by its strategic partnerships and ability to handle sensitive machinery relocations.

Revenue Streams and Customer Base

The company’s revenue streams are diversified across its three business segments. The customer base includes manufacturers requiring relocation services, logistics clients, and engineering project customers. The company’s competitive advantage lies in its specialized relocation capabilities and comprehensive service offerings.

Financial Statement Analysis

Income Statement

For the six months ended 30 September 2024, Chasen Holdings Limited reported a 24% increase in revenue to S\$54.0 million from S\$43.5 million in the previous year. The gross profit increased by 36% to S\$11.4 million, with an improved gross profit margin of 21.1%. The significant gain was due to the disposal of CZ Group, contributing to a net profit of S\$26.7 million, a substantial increase compared to S\$0.8 million in the previous year [[3]].

Balance Sheet

As of 30 September 2024, the company’s total assets stood at S\$217.1 million, an increase from S\$203.9 million as of 31 March 2024. The increase is primarily attributed to higher cash and cash equivalents from the proceeds of the CZ Group disposal. The company’s equity increased to S\$86.8 million, up from S\$65.3 million, reflecting a stronger financial position [[5-6]].

Cash Flow Statement

Net cash generated from investing activities was S\$37.3 million, mainly due to the proceeds from the disposal of CZ Group. Operating activities used S\$1.8 million, primarily due to changes in working capital. Net cash used in financing activities was S\$2.1 million due to loan repayments and lease liabilities [[10-11]].

Dividends

The company declared a special dividend of 3.00 Singapore cents per share, payable on 18 December 2024, reflecting its strong financial performance and the gain from the disposal of CZ Group [[32]].

Key Findings and Investment Recommendations

Strengths

• Significant net profit growth driven by the disposal of CZ Group.
• Improved gross profit margin due to higher revenue and cost control.
• Strong cash position and reduced debt levels.
• Declared a special dividend, enhancing shareholder returns.

Risks

• Impairment of goodwill on consolidation.
• Potential future adjustments related to the disposal of CZ Group.
• Competitive pressures in the Technical & Engineering segment.

Special Activities

The company completed the disposal of CZ Group, resulting in a gain and strengthening its financial position. It also announced plans to allocate proceeds towards new opportunities, dividends, and the development of the Chasen Logistics Hub [[22, 33]].

Investment Recommendations

If currently holding the stock: Given the strong financial performance, improved cash position, and special dividend declaration, it is recommended to continue holding the stock to benefit from potential future gains and dividends.

If not currently holding the stock: Considering the significant net profit growth and strategic initiatives, it is recommended to consider buying the stock to capitalize on the company’s strong financial outlook and dividend payout.

Disclaimer

This analysis is for informational purposes only and should not be considered as financial advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions.

Report Date

The report is dated 11 November 2024, covering the financial period of six months ended 30 September 2024 [[34]].