HG Metal Manufacturing Limited: Financial Review and Investor Analysis (FP2025 & FY2024)
HG Metal Manufacturing Limited, a trusted steel solutions leader in Southeast Asia with over 50 years of industry experience, has released its latest financial results. This article analyzes the company’s financial performance, dividend proposals, recent developments, and outlook, offering investors a clear view of the company’s fundamentals and prospects.
Key Financial Metrics and Comparative Table
| Metric |
FP2025
(9 months ended 30 Sep 2025) |
FY2024
(12 months ended 31 Dec 2024) |
YoY Change
(Annualized) |
| Revenue (S\$’000) |
130,273 |
157,867 |
-17% |
| Gross Profit (S\$’000) |
19,208 |
22,072 |
-13% |
| Gross Profit Margin |
14.7% |
14.0% |
+0.7pp |
| Net Profit (S\$’000) |
7,337 |
8,841 |
nm* |
| Net Profit Margin |
5.6% |
5.6% |
Unchanged |
| EPS (Diluted, S\$) |
0.0267 |
0.0361 |
nm* |
| NAV per share (S\$) |
0.56 |
0.53 |
+5.7% |
| Dividend per share (S\$) |
0.015 (proposed) |
– |
n.a. |
*nm: not meaningful as the periods compared are not the same length (9 months vs. 12 months).
Balance Sheet Highlights
- Cash and Cash Equivalents: S\$68.5M (FP2025), up from S\$55.4M (FY2024)
- Accounts Receivable: S\$57.1M (FP2025), slightly down from S\$61.4M (FY2024)
- Inventory: S\$9.8M (FP2025), down from S\$11.9M (FY2024)
- Working Capital: S\$140.7M (FP2025), increased from S\$133.3M
- Current Ratio: 13.3 (FP2025), up from 12.1
- Debt to Equity Ratio: 0.14 (FP2025), improved from 0.16
Dividend Summary
HG Metal has proposed a dividend of S\$0.015 per share for FP2025, subject to shareholders’ approval. There was no dividend declared in FY2024.
Historical Performance and Trends
While revenue and gross profit declined on a year-over-year basis (with FP2025 results covering only 9 months), gross profit margin improved to 14.7% from 14.0% in FY2024, indicating better cost control. Net profit margin remained stable at 5.6%. The company’s robust increase in cash and working capital, alongside a reduction in debt, signals prudent financial management and liquidity strength.
Exceptional Items and Corporate Actions
- Fundraising: The company raised SGD 19.9M through two share placements and an additional SGD 19.4M for expansion in 2024.
- Strategic Transformation: HG Metal divested non-core assets, focused on digital transformation, and optimized its core business.
- Sales Volume: Sales volume grew 29% in FP2025 compared to the same nine-month period in the previous financial year, despite a dip in revenue, likely due to lower steel prices.
Macroeconomic Environment and Market Outlook
- Sector Demand: Singapore construction demand remains strong, projected at S\$39–46 billion annually for 2026–2029, driven by MRT extensions, public housing, and infrastructure projects.
- Steel Market Pressure: Global oversupply and depressed steel prices, mainly from China, have squeezed margins and reduced contract competitiveness.
- Risks: Inflation, global trade uncertainties, project delays, and rising sustainability requirements (Green Plan 2030, carbon taxes) could affect costs and operations.
- Strategic Response: The company is optimizing inventory, enhancing cost control, securing long-term contracts, and focusing on infrastructure/public sector projects.
Recent Developments
- Secured supply contracts for several landmark Singapore infrastructure projects (e.g., Cross Island Line, Changi East Depot).
- Expanded value-added services and regional footprint.
- Capital raised through share placements supports expansion and digital initiatives.
Overall Financial Position and Outlook
HG Metal remains in a strong financial position with low leverage, a large cash buffer, and a diversified customer base. Its focus on infrastructure and public sector projects, coupled with digitalization and service expansion, provides resilience against cyclical downturns in private sector construction and global steel price volatility. However, the company faces ongoing margin pressure from global oversupply and competitive pricing.
Investment Recommendations
- If you currently hold the stock:
- The company’s fundamentals appear solid with a robust balance sheet, strong market position, and strategic initiatives to drive growth and efficiency. The proposed dividend and improved cash position are positive signals. Investors may consider holding the stock, monitoring for sustained margin improvement and execution of expansion plans.
- If you do not currently hold the stock:
- HG Metal offers exposure to Singapore’s construction and infrastructure boom, with a strong reputation and healthy financials. Prospective investors could consider accumulating on pullbacks, but should remain cautious of sector headwinds such as steel price volatility and potential project delays.
Disclaimer: This analysis is based strictly on the information provided in the company’s public financial report. It does not constitute financial advice. Investors should consider their own risk profile and consult professional advisors before making investment decisions.
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