V2Y Corporation Ltd. Financial Analysis – Net Profit Decline 12.4%

Business Description

V2Y Corporation Ltd. is a Singapore-based company with two main business segments: Insurtech and Food & Beverage (F&B).

• Insurtech: Provides third-party administration and value-added services to brand partners in the computer, communication, and consumer electronics sector, particularly for extended warranty and accidental damage protection programs.
• Food & Beverage: Involves operating restaurants and food stalls, food catering for corporate and private events, and trading and distribution of food products.

Industry Position

V2Y Corporation Ltd. operates in the technology-driven Insurtech sector and the highly competitive F&B sector. The company’s market share and competitive advantage in these segments are not detailed in the report.

Revenue Streams and Customer Base

The company generates revenue through the sale of goods and warranty support services. The Insurtech segment primarily services brand partners in the electronics sector, while the F&B segment targets consumers through retail operations and event catering.

Financial Statement Analysis

Income Statement

For the 3 months ended 30 September 2024 (3Q2024) and the 9 months ended 30 September 2024 (9M2024), V2Y Corporation Ltd. reported the following:

• Revenue Growth: Increased by 100% in 3Q2024 and 45.2% in 9M2024 compared to the same periods in 2023.
• Loss Before Income Tax: Increased by 73% year-on-year for 3Q2024 and 12.4% for 9M2024.
• Gross Profit: Decreased by 35.5% in 3Q2024 and 6.6% in 9M2024.

The increase in revenue is attributed to the new F&B business segment, but this segment also increased the cost of sales, affecting gross profit margins.

Balance Sheet

As of 30 September 2024:

• Total Assets: S\$1.96 million, up from S\$923,000 as of 31 December 2023.
• Total Liabilities: S\$1.6 million, up from S\$1.06 million as of 31 December 2023.
• Equity: Improved to S\$366,000 from a negative S\$137,000 as of 31 December 2023.

Cash Flow Statement

For the 9 months ended 30 September 2024:

• Net Cash Used in Operating Activities: S\$714,000, an increase from S\$672,000 in 9M2023.
• Net Cash Used in Investing Activities: S\$204,000, primarily due to new assets and leases for the F&B segment.
• Net Cash Generated from Financing Activities: S\$1.213 million, mainly from the issuance of ordinary shares.

Dividend Information

No dividend was declared for the current financial period or the corresponding period in the previous financial year.

Key Findings

Strengths

• Significant revenue growth due to the new F&B segment.
• Improved equity position through successful share issuance.

Risks

• Increased losses and administrative expenses.
• High reliance on the new F&B segment, which has lower profit margins.

Strategic Initiatives

The company is implementing cost reduction measures, streamlining its business, and pursuing new business opportunities in both the Insurtech and F&B segments to enhance profitability.

Recommendations

If you currently hold this stock: Monitor the company’s performance closely, especially the new F&B segment. Consider holding if you believe in the long-term potential of the strategic initiatives.

If you do not currently hold this stock: Exercise caution due to the recent increase in losses and ongoing integration of the new F&B segment. It may be prudent to wait for more consistent financial performance before investing.

Disclaimer

This analysis and recommendation are based on the financial report ending 30 September 2024. Please conduct your own research or consult with a financial advisor before making any investment decisions.