King Wan Corporation Limited: 1H2026 Financial Review

King Wan Corporation Limited has released its unaudited condensed interim financial statements for the half year ended 30 September 2025. The report provides insight into the company’s current financial standing, historical performance, and operational challenges. This analysis aims to present the key metrics, highlight significant trends and events, and offer recommendations for investors based strictly on the reported data.

Key Financial Metrics

* 2H2025 figures not disclosed; only balance sheet NAV is provided for comparison.

Historical Performance Trends

• Revenue: Down significantly by 50% YoY, mainly due to a slowdown in construction activity and projects being at the pre-construction phase.
• Profitability: Both gross profit and net profit saw steep declines (gross profit margin dropped to 2.1% from 9.1%).
• EPS: Down 67% YoY, reflecting reduced profitability.
• Net Asset Value: Slight decrease compared to prior period.
• Operating Cash Flow: Remained negative and stable at -S\$1.6m, indicating ongoing operational cash outflows.
• Dividend: No dividend declared for the current or previous period, prioritizing working capital.

Exceptional Items and Events

• Share of Profit from Associates and JV: Increased by S\$1.5m to S\$3.0m, mainly due to higher recognition from investment in Workers’ Dormitory.
• Net Fair Value Loss: FVTOCI investments (Kaset Thai International Sugar Corporation) saw a net fair value loss of S\$1.3m due to a decline in quoted market price.
• Administrative Expenses: Rose by S\$0.5m, partly due to costs linked to acquisition of leasehold property, rental expense, and staff costs.
• Income Tax Credit: S\$0.2m credit (vs. S\$0.3m expense last year), due to tax losses incurred.

Corporate Actions and Subsequent Events

• Leasehold Property Acquisition: On 6 October 2025, the group completed the acquisition of property at 15 Joo Koon Way for S\$9.0m.
• Divestment of Associate: On 13 October 2025, King Wan disposed of its 30% stake in Gold Hyacinth Development Pte. Ltd. for S\$3.56m. GHD ceased to be an associate following completion.
• Financial Guarantees: The company has outstanding guarantees of up to S\$37.9m for subsidiaries and associates, but does not expect to be required to settle these.

Liquidity and Balance Sheet Highlights

• Current Ratio: Both Group and Company have current liabilities exceeding current assets, but management asserts continued support from bankers and sufficient liquidity for the next 12 months.
• Undrawn Credit Facilities: S\$12.8m available, supporting liquidity.
• Total Equity: S\$68.6m as at 30 September 2025, down from S\$69.2m at 31 March 2025.

Macroeconomic and Industry Commentary

Singapore’s Ministry of Trade and Industry upgraded its GDP forecast for 2025, but noted that risks remain tilted to the downside. King Wan expects its M&E business to face challenges from rising costs and economic headwinds. The order book stands at S\$198.3m, with M&E and toilet rental businesses expected to remain key income streams.

Dividend Information

• No dividend declared for the current period.
• No dividend declared for the same period last year.

Chairman’s Statement

On behalf of the Board of Directors of the Company, we, the undersigned, hereby confirm to the best of our knowledge that nothing has come to the attention of the Board of Directors of the Company which may render the financial statements for the six-month period ended 30 September 2025 to be false or misleading in any material aspect.

Tone: Neutral and factual, with no forward-looking optimism or pessimism implied.

Conclusion and Investment Recommendations

Overall, King Wan Corporation’s financial performance for 1H2026 is weak. The company faces significant revenue and profit declines, ongoing negative operating cash flow, and a challenging macroeconomic environment. While the company maintains a sizable order book and asserts sufficient liquidity for the next year, lack of dividend payments and continued operational headwinds suggest a cautious outlook.

• If you are currently holding this stock: Consider reviewing your position in light of weak earnings, lack of dividends, and ongoing industry challenges. Hold only if you are comfortable with medium-term volatility and have confidence in management’s ability to deliver on the order book. Otherwise, a partial reduction in exposure may be prudent.
• If you are not currently holding this stock: There is little immediate catalyst for entry, given the weak results and challenging outlook. Consider waiting for signs of operational improvement, stronger earnings, or the resumption of dividends before initiating a position.

Disclaimer: This analysis is based solely on the information disclosed in King Wan Corporation Limited’s interim financial statements for 1H2026. It does not constitute financial advice. Investors should consider their own risk tolerance, investment objectives, and consult with a licensed financial adviser before making any investment decisions.

View King Wan Historical chart here