Serial Achieva Limited: 1H2025 Financial Results Analysis

Serial Achieva Limited, listed on the Catalist Board of SGX, has released its unaudited condensed interim financial statements for the half-year ended 30 June 2025. The Group, involved in the distribution and marketing of IT products, has shown significant growth following its expansion into Thailand. Below is a comprehensive analysis of its performance, key financial metrics, and outlook.

Key Financial Metrics (1H2025 vs 1H2024)

Historical Performance Trends

• Revenue Growth: The Group’s revenue surged by 153% YoY, largely due to the commencement of operations in Thailand, which contributed \$20.8m. The Malaysian segment also posted a healthy 47% increase in turnover, driven by strong consumer demand for desktop CPUs, VGA cards, motherboards, and laptops.
• Profitability: While gross profit increased sharply, margins remain thin at 3.4%. The Group narrowed its net loss significantly, reporting a \$0.36m loss versus \$5.08m a year ago. The prior period included exceptional, non-recurring items related to a reverse takeover and share-based introducer fees.
• Operating Expenses: Distribution, administrative, and other operating expenses all rose, reflecting higher activity, expansion into Thailand, increased staff costs, and professional fees.

Exceptional Items and Non-Recurring Expenses

• In 1H2024, the Group incurred a one-off loss of \$4.2m from a reverse takeover and \$0.37m in introducer fees paid in shares. There were no exceptional items in the current period.

Balance Sheet and Cash Flow Highlights

• Receivables: Trade and other receivables decreased by \$7.6m following the cessation of the Singapore subsidiary and improved collections.
• Inventories: Increased by \$4.3m to support sales growth, especially in Thailand.
• Payables: Trade and other payables fell by \$7.1m due to payments related to the ceased Singapore entity.
• Borrowings: Increased by \$1.3m to \$7.3m, reflecting funding for higher inventory.
• Net Gearing: Jumped to 100% (from 22% at end-2024) due to increased debt and lower cash balances.
• Cash Flow: Operating cash flow was positive at \$1.0m, primarily from working capital movements. Investing and financing activities used \$0.04m and \$3.2m, respectively.

Related Party Transactions and Mandates

• The Group renewed its IPT mandate, with significant transactions including \$18.8m in purchases and fees with Serial I-Tech (Far East) Pte. Ltd. and \$13.1m with Serial Microelectronics Pte Ltd. These are wholly-owned subsidiaries of the holding company, Serial System Ltd.

Corporate Actions and Fundraising

• No share buybacks or new share issues occurred in the period. The Company utilized \$1.85m in net proceeds from its June 2024 compliance placement primarily for ASEAN business expansion, operational upgrades, and working capital.
• A new wholly-owned subsidiary, Achieva Cloud Services Pte. Ltd., was incorporated in Singapore in July 2025 to provide colocation and data center services, signaling a diversification into cloud infrastructure.

Dividends

• No interim dividend was declared or recommended for 1H2025, in line with the Group’s ongoing losses and accumulated deficits.

Risk Factors and Outlook

• The Group faces a competitive and cautious market environment in Malaysia and Thailand, impacted by inflation and growing e-commerce competition.
• Key risks include currency volatility, supply chain disruptions, tariffs and trade restrictions, and customer credit risks.
• Management is focusing on expanding the product portfolio—especially in gaming, cloud storage, and AI solutions—and accelerating regional growth into Southeast Asia (Vietnam, Indonesia, and the Philippines) through strategic partnerships and acquisitions.

Conclusion

Serial Achieva Limited delivered a strong topline recovery in 1H2025, driven by successful expansion into Thailand and robust demand in Malaysia. While the Group remains loss-making, losses have narrowed significantly, and core business trends are positive. However, thin margins, rising gearing, and exposure to market and credit risks warrant caution. The absence of a dividend and ongoing investments in expansion suggest the Group is prioritizing growth and market share over near-term profitability. The overall outlook is neutral to positive, contingent on the Group’s ability to manage risks and execute on its regional growth plans.

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