United Food Holdings Limited: Q1 FY2026 Financial Review and Outlook

United Food Holdings Limited has released its unaudited condensed interim financial statements for the three months ended 30 June 2025 (Q1 FY2026). The report reveals a company in the midst of restructuring, with operations heavily impacted by asset disposals, delisting proceedings, and ongoing financial challenges. Below, we examine the key financial metrics, performance trends, and noteworthy events as disclosed in the report.

Key Financial Metrics and Performance Comparison

Historical Performance and Trends

• Revenue from continuing operations was zero for the last several quarters. Revenue from discontinued operations also dropped to zero in Q1 FY2026, compared to RMB 294,000 in Q1 FY2025.
• Net loss has narrowed sharply to RMB 1.0 million in Q1 FY2026 from RMB 8.4 million a year ago, mainly due to lower administrative and other expenses.
• Loss per share has improved in line with the reduction in net loss, but the business remains loss-making.
• Net asset value per share has plummeted from prior years, indicating significant erosion of shareholder equity.

Exceptional Expenses and Issues

• Other expenses dropped from RMB 4.1 million to RMB 7,000 YoY, as penalties and other one-off items from last year were not repeated.
• A full provision of RMB 82.0 million was made for uncollected deposits and receivables from Shenzhen Shareihome Technology Co., Ltd. (“SST”) due to non-response and unsuccessful recovery efforts.
• The company continues to face collection issues with major debtors, including Kangweijian (“KWJ”) and SST.

Divestments and Discontinued Operations

• The board decided to dispose of all equity interests in Chengde Purun Shengwu Zhiyao Co., Ltd, Hebei Xingrun Shengwu Keji Gufen Co., Ltd, and Benchmark Trade Limited. These are now classified as assets held for sale and discontinued operations.
• No bonds were issued under the profit warranty arrangement for these businesses, as the profit conditions were not met.

Delisting and Corporate Actions

• On 14 August 2024, SGX RegCo notified the company of its delisting from the Singapore Exchange. The company is preparing a mandatory exit offer for shareholders.
• No share buybacks, placements, or new fundraisings were reported.
• No dividends have been declared for the quarter or the prior comparable period, given the company’s loss position and need to preserve cash for working capital.

Cash Flow and Liquidity

• Net cash outflow from operations was RMB 278,000 for the quarter, while financing activities contributed RMB 243,000, resulting in a net cash decrease of RMB 35,000. Cash and cash equivalents stand at just RMB 328,000, highlighting a precarious liquidity position.
• The company faces overdue payables, including staff salaries and professional fees, and has not received meaningful financial support from controlling shareholders.

Audit Issues and Internal Control Concerns

• The company’s latest annual audit received a disclaimer of opinion due to inability to verify key balances and transactions. Special audits and internal investigations have been ongoing, but control weaknesses remain unresolved.
• No auditor, internal auditor, legal counsel, or company secretary is currently in place.

Chairman’s Statement

“We, Song Yanan, being Directors of the Company, hereby confirm that to the best of our knowledge, nothing has come to the attention of the Board of Directors of United Food Holdings Limited which may render the unaudited financial statements for the three months ended 30 June 2025 to be false or misleading in any material aspect.”

The tone of the statement is neutral and procedural, lacking any positive outlook or strategic direction.

Significant Risks and Forward-Looking Events

• The company is in the process of delisting and must provide an exit offer to shareholders, but has yet to appoint an Independent Financial Advisor or finalize the proposal.
• There is uncertainty regarding the disposal of discontinued subsidiaries and collection of long-outstanding receivables.
• The company’s ability to meet its debt obligations is in question, with estimates suggesting at least SGD 1.5-2.0 million is needed over the next 12 months to remain compliant with listing rules (which may be irrelevant post-delisting).
• Internal control and governance weaknesses are acknowledged but not yet resolved.

Conclusion and Recommendation

Overall, United Food Holdings Limited’s financial performance and outlook remain weak. The absence of revenue, persistent losses, eroded net assets, severe liquidity stress, unresolved governance issues, and impending delisting create a high-risk environment for shareholders.

For current investors: The imminent delisting and exit offer process mean liquidity will soon be unavailable on the open market. Investors should closely monitor the exit offer details and consider exiting their positions via the offer once terms are finalized, as the prospects for value recovery outside this mechanism appear limited.

For prospective investors (not holding the stock): Given the company’s loss of listing status, lack of a turnaround plan, unresolved governance issues, and ongoing financial distress, it is prudent to avoid initiating any position in United Food Holdings Limited at this time.

Disclaimer: This analysis is based solely on information disclosed in the company’s Q1 FY2026 interim financial statements. It does not constitute investment advice. Investors should consult their own financial advisors and consider their own risk tolerance before making any investment decisions.

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