HL Global Enterprises Limited 1H2025 Financial Analysis

Key Financial Metrics (1H 2025 vs 1H 2024)

• Revenue: \$2,843,000 (1H 2025) vs \$2,793,000 (1H 2024) (+1.8%)
• Cost of Sales: \$1,553,000 (1H 2025) vs \$1,517,000 (1H 2024) (+2.4%)
• Gross Profit: \$1,290,000 (1H 2025) vs \$1,276,000 (1H 2024) (+1.1%)
• Other Income: \$838,000 (1H 2025) vs \$1,082,000 (1H 2024) (-22.6%)
• Selling & Marketing Expenses: \$97,000 (1H 2025) vs \$96,000 (1H 2024) (+1.0%)
• Administrative Expenses: \$160,000 (1H 2025) vs \$203,000 (1H 2024) (-21.2%)
• Finance Costs: \$7,000 (1H 2025) vs \$2,000 (1H 2024) (+250%)
• Other Expenses: \$1,343,000 (1H 2025) vs \$1,216,000 (1H 2024) (+10.4%)
• Profit Before Tax: \$521,000 (1H 2025) vs \$840,000 (1H 2024) (-38.0%)
• Net Profit: \$451,000 (1H 2025) vs \$770,000 (1H 2024) (-41.4%)
• Earnings Per Share (Basic & Diluted): 0.48 cents (1H 2025) vs 0.82 cents (1H 2024)
• Net Asset Value per Share (Group): \$0.85 (30/06/2025) vs \$0.85 (31/12/2024)
• Net Asset Value per Share (Company): \$0.93 (30/06/2025) vs \$0.93 (31/12/2024)
• Cash and Bank Balances: \$61,432,000 (30/06/2025) vs \$60,951,000 (31/12/2024)

Source: [[3]], [[4]], [[10]]

Historical Performance: Year-on-Year & Quarter-on-Quarter Comparison

• Revenue growth is minimal (+1.8%), mainly from FX translation; in local currency, underlying revenue actually declined due to lower occupancy and rates in the core hotel business.
• Gross profit margin is flat year-on-year.
• Other income fell sharply (-22.6%) as both interest income and license fees dropped; the license fee loss is due to the termination of the Shanghai International Club Co Ltd agreement effective March 2025.
• Net profit dropped significantly by 41.4%, mainly due to lower other income and higher operating costs, especially in the hospitality segment.
• Quarter-on-quarter data is not provided in the report. Only half-year and full-year data are available.

Source: [[3]], [[13]]

Asset Revaluation or Delay

• There is no asset revaluation performed in 1H 2025. The management states that, based on 31 Dec 2024 valuations and no significant adverse factors, they do not expect material impairment, but plan to obtain independent valuation reports at year end for both property, plant and equipment and investment property.

Source: [[10]], [[11]]

Exceptional Earnings and Expenses

• Exceptional Loss: Termination of the license agreement with Shanghai International Club Co Ltd in March 2025 led to a fall in license fee income.
• There is a gain on disposal of property, plant and equipment (\$1,000), but this is not material.
• Overall, there are no significant exceptional items except the loss of license fee.

Source: [[9]], [[13]]

Directors’ Pay

• Directors’ fees for 1H 2025: \$96,000 (same as 1H 2024).
• Total key management compensation (including directors): \$241,000 (1H 2025) vs \$237,000 (1H 2024).

Source: [[9]]

Related Party Transactions and Fund Flows

• Bank balances held with a related party: \$13,131,000 (30/06/2025) vs \$4,630,000 (30/06/2024).
• Expenses paid to related companies include rental, secretarial/consultancy fees, insurance, IT, franchise, and marketing fees, all at arms-length and disclosed.
• No indication of unusual or suspicious fund flows.

Source: [[9]], [[10]]

Share Capital, Dilution, Buybacks

• No new shares issued, buybacks, sales, transfers, or cancellations during the period. The share capital remains at 93,915,337 issued shares (excluding trust shares) as at 30 June 2025 and 31 Dec 2024.
• No buyback mandate or commitment disclosed.

Source: [[12]]

Proposed Dividend

• No dividend proposed for 1H 2025. The company will review this at financial year-end.

Source: [[14]]

Chairman’s Statement (Full Extract & Analysis)

“The Board hereby confirms that, to the best of its knowledge, nothing has come to the attention of the Board which may render the Group’s unaudited interim financial results for the half year ended 30 June 2025 to be false or misleading in any material aspect.
On behalf of the Board
Dato’ Gan Khai Choon Hoh Weng Ming
Chairman Director
Singapore 4 August 2025
BY ORDER OF THE BOARD
Foo Yang Hym
Chief Financial Officer
Singapore 4 August 2025
The Group’s assets and operations are mainly located in Malaysia, it will be exposed to currency risks. The Group continues to source for sustainable and viable business and will exercise prudence in its review when such opportunities arise.
Our hotel in Cameron Highlands continues to face persistent challenges, including intense competition and a shortage of skilled labor. Despite facing rising operating costs driven by government mandated minimum wage increases and higher food prices, the hotel is unable to raise the average room rates. This is primarily due to an oversupply of hotel apartments in the market, which limits our pricing flexibility.
The quantity surveyor is in the midst of inviting contractors to submit quotations for building the 48 high-rise apartment units in Kea Farm Brinchang, Cameron Highlands. Regarding the conversion of the Entertainment Complex into a hotel and function rooms, the architect and engineer are revising the layout plan of the Entertainment Complex and resubmitting it to the relevant authority for approval. This is intended to enhance the value of the new hotel and facilitate the future sales of the MICE (Meetings, Incentives, Conferences, and Exhibitions) business.”

Analysis: The tone is cautious and realistic, highlighting persistent challenges (competition, wage pressure, inability to raise room rates). There is mention of ongoing development and asset enhancement, but no immediate catalyst for turnaround. The outlook is neutral to negative due to market oversupply and cost pressures.

Source: [[14]]

Potential Divestment, Listing, or Fund-Raising

• No mention of any potential divestment, listing, or material fund-raising activity.

Events That May Lead to Gains or Losses

• The company faces sector-specific risk: oversupply in hotel apartments, labor shortages, rising minimum wage in Malaysia, and foreign currency risk due to substantial Malaysian operations.
• No mention of natural disasters, disputes, litigation, or loss of tax benefits.

Source: [[13]], [[14]]

Sudden Changes in Profit, Revenue or EPS

• There is a significant drop in net profit (-41.4%) and EPS (from 0.82 cents to 0.48 cents) due to lower interest and license fee income, and higher costs in the hospitality segment.

Source: [[3]], [[13]]

Forecasted Events and Development

• Plans are underway for new developments: building 48 high-rise apartments and conversion of the Entertainment Complex to a hotel/function room/MICE facility. These are still in approval/quotation stage and may have positive impact if successfully executed.

Source: [[11]], [[14]]

Insights & Conclusion

• The group’s financial performance is weakening, with profit down sharply despite stable revenue. This is due to lower other income and higher costs, reflecting tough market conditions.
• Management is taking prudent steps, but the outlook remains challenging due to sector oversupply, labor issues, and cost pressures. Asset enhancement and development projects may help, but are still in early stages.
• No errors were detected in the financial report based on the information given.
• No share dilution, buybacks, or new equity issues; the capital base is stable.
• No dividend payout for the period, reflecting cautious capital management amid uncertain prospects.
• Investors should monitor FX risk, the progress of property development, and the competitive environment in Cameron Highlands.

Prepared by: Financial Analyst, Hedge Fund Team

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