Infinity Development Holdings 2025 AGM Q&A: Indonesia Plant, Expansion Plans, Financials, and Strategic Outlook

Infinity Development Holdings Responds to Shareholder and SIAS Queries: Key Updates and Investor Considerations

Overview

Infinity Development Holdings Company Limited (“the Company” or “the Group”) has released a comprehensive response to questions submitted by shareholders and the Securities Investors Association (Singapore) (SIAS) ahead of its upcoming Annual General Meeting. The responses cover a range of important operational, financial, expansion, and governance topics that are critical for existing and potential investors to understand.

Key Operational and Strategic Updates

Indonesia Operations: No Impact from Caesium-137 Contamination

Media reports in November 2025 raised concerns about Caesium-137 contamination affecting Indonesian footwear exports to the US.
The Company clarified that its operations and supply chain remain stable, with no disruption to production, deliveries, or customer relationships as a result of the contamination scare.
The Company’s new plant in Kendal, Central Java, is geographically distant from the affected area and is not expected to be impacted.
The Company continues to monitor developments and will make further announcements if material issues arise.

New Indonesia Plant: Capacity, Timeline, and Rationale

The new plant at Kendal Industrial Park is designed for a production capacity of 14,000 tons per year, subject to customer demand and market conditions.
Some regulatory approvals for full commercial operations are still pending, but trial production is underway.
The plant’s establishment aims to improve cost competitiveness, shorten freight times, and meet rising demand, especially from the Muslim-majority market where casual footwear is gaining popularity.
Existing plant operations will continue in parallel to ensure supply stability, with a gradual phase-out based on market conditions.
The expansion increases total Group capacity by approximately 10.7% to 83,000 tons per year (Vietnam: 41,000, PRC: 28,000, Indonesia: 14,000).

Capital Commitments and Expenditure

Capital commitments as of 30 September 2025 were HK\$17.5 million, primarily allocated to the new Indonesia plant.
Total estimated capex for the Indonesia plant: HK\$90.4 million, with HK\$76.1 million incurred up to September 2025 and HK\$14.3 million expected in FY2026.
No significant capital commitments are planned for China or Vietnam plants unless market conditions require.

India Expansion: Timeline and Funding

The Company is planning a new plant in India, targeting operational readiness by FY2027.
Funding will come from internal resources and part of the Singapore IPO proceeds, in line with allocations in the Offer Document.
The Company will announce any material use of IPO proceeds as required.
India sales in FY2025 were HK\$10.45 million (1.25% of total revenue), with management optimistic about further growth.

Revenue & Customer Dynamics

Revenue Growth: The Group achieved year-on-year revenue growth across all regions in FY2025, driven by sustained customer demand, especially in Indonesia and the PRC.
Largest Customer: Long-term relationship (over 30 years) with its largest customer, a global footwear manufacturer supplying major international brands.
Brand Dependency: Revenue visibility by international brand is limited as customers do not break down adhesive use by brand, but key customer relationships drive demand.
Customer Diversification: The Group aims to balance deep partnerships with key customers and broaden its customer base over time.

Profitability and Margin Outlook

Gross profit margins remained stable in FY2024 and FY2025.
Margin resilience is supported by disciplined cost management, operational efficiency, and capacity expansion.
Profit margins are influenced by raw material costs and direct overheads. The Company does not engage in hedging or commodity speculation, so margins may be affected by input price volatility.

Research, Innovation & Sustainability

R&D expenses were HK\$3.4 million in FY2024 and HK\$4.3 million in FY2025 (0.74% and 0.83% of cost of sales, respectively).
The Group focuses on water-based, eco-friendly adhesives and received a Champion Award for ZDHC MRSL Level 3 Certification from an international athletic brand in 2025.
Collaborations with technical experts from Japan, Taiwan, Hong Kong, and a leading German chemical supplier support product innovation.
Although exact sales figures for green products are not available, management expects eco-friendly product offerings to positively impact sales with existing customers, especially those supplying international brands.

Geopolitical Risks and Market Headwinds

Tariffs and Global Uncertainties: The Company acknowledges potential risks from tariffs on footwear imports into the US, geopolitical volatility, fluctuating raw material prices, and rising labor costs.
Despite these risks, the Group’s regional presence and established customer relationships provide some stability.
The Company adopts a prudent business outlook for FY2026 and is unable to provide profit margin estimates due to market volatility.

Corporate Governance and Management

The Chairman, Mr. Ieong Un, also serves as CEO. The Board believes this does not impair governance due to a strong, independent board structure and majority voting.
A Lead Independent Non-Executive Director is available as an alternative contact for shareholders.
Succession planning and potential separation of the Chairman and CEO roles are under regular review by the Nomination Committee.
Independent Directors actively participate in board decisions, ensuring robust oversight.

Business Strategy and Future Plans

The Group’s strategy remains focused on consolidating relationships with major customers and supporting their production shifts in Indonesia and India.
Own brand adhesive products (“Zhong Bu” and “Centresin”) remain core; third-party production is not a strategic focus, and there are no plans for new business lines beyond disclosures in the Offer Document.

Financial Management and Capital Structure

The Company maintains a strong net cash position and low debt to support operational flexibility and growth, including expansions in Indonesia and India.
No plans for special cash dividends beyond regular distributions. A share buyback mandate will be proposed at the AGM for future flexibility, but no buyback is currently planned.

IPO and Listing on SGX Catalist

Singapore listing expenses: Total estimated at S\$2.6 million (HK\$15.6 million), with HK\$10.3 million booked by FY2025 and the remainder expected in FY2026.
The SGX Catalist listing aims to diversify the shareholder base, enhance market access, and support regional growth strategies.
Management is committed to business stability, growth, stable dividends, and improved share liquidity through increased investor engagement.

Dividend Policy

The Company’s dividend policy is detailed in its annual report. No changes were announced in the AGM response.

Investor Takeaways and Potential Price-Sensitive Issues

Indonesia plant expansion: Major capex nearly complete; regulatory approvals pending. Full commercial operations, once commenced, could drive revenue and margin improvements.
India expansion: New plant targeted for FY2027, to be partially funded by IPO proceeds. Success in India could significantly expand the Group’s addressable market.
Geopolitical and cost risks (tariffs, input costs) remain material uncertainties that could impact profitability and are a key watchpoint for investors.
Product innovation and green certifications position the Group to benefit from global trends, although the financial impact is not yet quantifiable.
Share buyback mandate could be supportive for the share price if executed, but no immediate plans are in place.
Stable financial position with net cash and low debt gives the Group flexibility to pursue growth and return capital to shareholders if warranted.

Conclusion

Infinity Development Holdings is at a critical juncture, with major expansion projects in Indonesia nearing completion and new growth prospects in India. The Group’s strong customer relationships, eco-friendly product innovation, and disciplined financial management position it well for future growth. However, investors should closely monitor regulatory approvals for the Indonesia plant, progress on the India expansion, and the evolving geopolitical landscape, all of which could affect future performance and share value.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should refer to the Company’s official filings and consult their financial advisors before making investment decisions. The author and publisher are not responsible for any actions taken based on this article.