Fu Yu Corporation Surges Back to Profit: 3Q2025 Net Profit Hits S\$2.4 Million, Margins Soar as Group Eyes New Risks

Key Highlights for Investors

• Turnaround in Profitability: Fu Yu Corporation Limited reported a net profit of S\$2.4 million for 3Q2025, a sharp turnaround from a net loss of S\$2.6 million in 3Q2024, driven by increased revenue and improved margins.
• Strong Gross Profit Growth: Gross profit from the core manufacturing business surged by 61.1% to S\$5.8 million, with the gross profit margin improving significantly to 18.7% from 11.7% a year ago.
• Revenue Growth: Manufacturing revenue for the quarter grew by 2.0% to S\$31.2 million. For the nine months ended 30 September 2025 (9M2025), revenue was up 7.1% at S\$91.7 million, reflecting sustained demand from existing customers in Singapore.
• Operational Resilience and Cash Position: The Group’s net cash stood at S\$48.4 million (6.4 cents per share) as at 30 September 2025, providing a robust buffer against short-term uncertainties.
• Higher Contributions from Singapore: Singapore operations grew 31.5% in 9M2025, now making up 47.8% of total manufacturing sales, offsetting weaker performance in China and Malaysia.
• Segmental Growth: Medical products turnover saw the highest growth, up to S\$29.8 million (32.5% of manufacturing revenue), while the consumer segment also increased to S\$41.8 million.
• Strategic Restructuring in China: The Group is consolidating its China manufacturing footprint, winding down the Zhuhai facility and shifting most of its revenue to Dongguan to enhance operational efficiency and mitigate the risks of new US tariffs on Chinese exports.
• One-Off Costs Impacting 9M2025 Results: Despite operational gains, the Group posted a net loss of S\$7.0 million for 9M2025 due to one-off costs (professional fees, Zhuhai closure, bad debts, forex losses) totalling S\$8.1 million.
• Shareholders’ Equity and Cash: Equity stood at S\$131.9 million as of 30 September 2025, with a strong cash position to weather challenges.

Details Investors Need to Know

Fu Yu Corporation Limited, Singapore’s oldest and one of Asia’s largest high-end precision plastic and metal component manufacturers, has delivered a significant rebound in its third-quarter results for 2025. The Group’s core manufacturing business returned to profitability with a net profit of S\$2.4 million in 3Q2025, reversing a net loss of S\$2.6 million in the same period last year. This performance was underpinned by a 2.0% year-on-year rise in manufacturing revenue to S\$31.2 million, mainly attributed to increased orders from existing Singapore customers.

Gross profit growth far outpaced revenue growth, soaring 61.1% to S\$5.8 million. The gross profit margin rose to 18.7%, reflecting improved operational efficiency and cost controls. On a nine-month basis, manufacturing revenue totalled S\$91.7 million (up 7.1%), with gross profit rising 19.8% to S\$12.7 million and margins improving to 13.8%.

While the Group’s core business is showing strong operational momentum, investors should note that the 9M2025 bottom-line was heavily affected by several one-off costs. These include professional fees (S\$2.3 million), closure of the Zhuhai manufacturing facility (S\$3.0 million), provision for bad debts (S\$0.6 million), and significant foreign exchange losses (S\$2.2 million). As a result, Fu Yu reported a net loss of S\$7.0 million for 9M2025, compared to a loss of S\$1.9 million in 9M2024. Excluding these items, EBITDA for 3Q2025 and 9M2025 stood at S\$4.0 million and S\$6.0 million, respectively.

A key strategic development is the Group’s decision to wind down its Zhuhai facility in response to new US tariffs on exports from China, a potentially price-sensitive move that could impact future earnings and operations. Over 90% of the Zhuhai facility’s revenue will be shifted to the Dongguan plant, minimizing operational disruption. This consolidation is aimed at improving efficiency and mitigating geopolitical risks associated with US-China trade tensions.

From a geographic standpoint, Singapore’s contribution to overall manufacturing revenue jumped to 47.8% in 9M2025 from 38.9% a year earlier, driven by robust sales in export tooling, medical, and consumer products. In contrast, Malaysia and China saw softer sales, with their shares of revenue dipping to 26.2% and 26.0%, respectively.

On the segmental front, the medical products division was the top performer, with turnover up to S\$29.8 million, representing 32.5% of manufacturing revenue, against S\$23.9 million (27.9%) in 9M2024. The consumer products segment also posted growth, rising to S\$41.8 million. However, lower sales volumes for networking & communication and printing & imaging products in China and reduced contributions from automotive and power tools in Singapore and Malaysia partially offset these gains.

Fu Yu’s financial position remains strong, with net cash of S\$48.4 million and shareholders’ equity of S\$131.9 million as of 30 September 2025. This liquidity provides the Group with a solid buffer to navigate ongoing industry headwinds and execute its restructuring plans.

Shareholder Considerations & Price-Sensitive Information

• Return to Profitability: The swing from loss to profit in 3Q2025 could be a key catalyst for positive investor sentiment and share price movement.
• One-Off Costs: The reported net loss for 9M2025 is largely due to non-recurring charges. Excluding these, underlying operational performance is robust.
• China Restructuring & US Tariffs: The closure of the Zhuhai facility and the shift of revenue to Dongguan is a material event, undertaken in response to evolving US-China trade tensions. Any further escalation of tariffs, or disruptions during the transition, could have a significant impact on future earnings and share price.
• Segment and Geographic Shifts: Growth in Singapore and the medical segment highlights successful diversification and resilience, but ongoing weakness in China and Malaysia remains a risk.
• Strong Cash Position: With S\$48.4 million in net cash, the company is well positioned to withstand uncertainties and invest in future growth.

Outlook

Fu Yu is closely monitoring the impact of new US tariffs and remains focused on executing its China restructuring and maintaining a healthy project pipeline. Management’s actions to consolidate its manufacturing base and improve efficiency, alongside its robust cash reserves, position the Group to navigate near-term challenges. However, investors should watch for any developments in US-China trade relations and operational execution risks as potential share price movers.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult a professional advisor before making any investment decision. The writer and publisher accept no liability for any losses incurred from reliance on the information provided.

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