OxPay Financial Limited: 3Q2025 and 9M2025 Financial Review

OxPay Financial Limited has released its unaudited condensed interim consolidated financial statements for the third quarter and nine months ended 30 September 2025. This analysis covers key financial metrics, performance trends, major corporate actions, and the outlook for the company based strictly on the disclosed report.

Key Financial Metrics and Performance Comparison

Historical Performance and Trends

For the first nine months of 2025, OxPay recorded a revenue of S\$3.4 million, up 21% year-on-year from S\$2.8 million. However, net loss for the period widened by 7% to S\$2.1 million compared to S\$2.0 million a year ago. Gross profit margin declined from 67% to 54%, attributed to increased revenue from the Malaysian DCES segment, which carries a lower margin, and the absence of a one-off merchant settlement recognised in 2024.

Exceptional Items

• One-off Fine: A fine and penalty of S\$0.1 million was recorded in 9M2025.
• Government Grants: Other income rose by S\$0.15 million, largely due to increased government grants.
• Bad Debts: S\$0.1 million in merchant receivables was written off as bad debts.

Capital Structure, Fundraising, and Related-Party Transactions

• Share Placement: In June 2025, OxPay placed 35.4 million new shares at S\$0.01197 each, raising net proceeds of S\$394,000. These proceeds remain unutilised as of the report date.
• Convertible Loan: The company drew down a S\$2.0 million convertible loan in April 2025 from its controlling shareholder’s company, with a further facility of up to S\$2.5 million available. This has increased interest expense and resulted in potential dilution if converted (up to 88.4 million shares).
• Negative Equity Position: As at 30 September 2025, the group is in a negative equity position of S\$0.9 million, down from a positive S\$0.8 million at the end of 2024. This is mainly due to continued losses.
• No Dividends: No dividends were declared or paid for the period, consistent with the company’s accumulated losses.

Liquidity and Cash Flow

• Net cash used in operating activities for 9M2025 was S\$0.4 million, an improvement over the previous year.
• Cash and cash equivalents increased by S\$0.8 million year-to-date, mainly due to financing activities (share placement and convertible loan drawdown).
• As of 30 September 2025, S\$3.6 million of cash is earmarked for merchant settlements.

Corporate Actions and Notable Events

• Applications have been submitted to strike off two inactive subsidiaries.
• OxPay’s stake in PT Iforte Payment Infrastructure was diluted from 4.16% to 3.42% following a new share issuance by the latter.

Macroeconomic and Industry Outlook

The company notes improving retail sales in Singapore and continued digitalisation among micro, small, and medium enterprises (MSMEs). New product launches and a re-entry into Thailand and expansion in Malaysia are part of its growth strategy. The payments industry remains competitive, with merchant acquisition barriers falling but margin pressure persisting.

Chairman’s Statement

“The Group’s business focus remains firmly centred on micro, small and medium enterprises (“MSMEs”), a segment that continues to undergo rapid digitalisation. In addition, the Group continues to overhaul and upgrade its technology capabilities and processes to drive scalability and operational efficiency… Moving forward, the Group will continue to execute on these priorities, focusing on the full roll-out of its new product suite and expanding its regional presence, while maintaining a strategic emphasis on essential and digital services that have demonstrated resilience amid macroeconomic headwinds.”

The tone of the Chairman’s statement is cautiously positive, emphasizing growth opportunities and technological upgrades, while acknowledging the need for operational improvements and resilience.

Risks and Going Concern

• The company’s negative equity position and continued losses raise material uncertainties on going concern, although management asserts sufficient liquidity for the next 12 months and ongoing support from the controlling shareholder.
• Increased gearing and dilution risk from convertible loans.
• No mention of major legal disputes, policy changes, or disaster-related risks.

Conclusion and Investor Recommendations

Overall Assessment: OxPay demonstrates revenue growth and an improving cash position due to successful fundraising. However, it remains loss-making with declining margins, negative equity, and ongoing reliance on shareholder support and external financing. The absence of a dividend and continued negative earnings are concerns, though new product launches and regional expansion offer some upside potential.

• If you currently hold the stock:
  
  Investors should closely monitor the company’s ability to achieve profitability and restore positive equity, as well as the execution of its regional growth strategy. Given the negative equity and continued losses, risk is elevated. Consider holding only if you have a high risk tolerance and confidence in management’s turnaround plan.
• If you do not hold the stock:
  
  Caution is advised before initiating a position. Wait for clear evidence of a turnaround—such as sustained profitability, improved margins, or successful execution of regional strategies—before considering an investment.

Disclaimer: This analysis is based solely on information disclosed in the company’s 3Q2025 and 9M2025 financial report. It does not constitute investment advice. Investors should conduct their own due diligence and consult a licensed financial advisor before making any investment decisions.

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