Lion Asiapac Limited: 2Q & Half-Year FY2026 Financial Analysis

Lion Asiapac Limited (“Lion Asiapac”) released its unaudited condensed interim financial statements for the second quarter and half-year ended 31 December 2025. The company operates mainly in roofing solutions, trading of mining equipment, and investment holding. This review highlights key financial metrics, performance trends, noteworthy transactions, and offers an investor recommendation based strictly on the reported figures.

Key Financial Metrics

• Revenue (2Q 2026): S\$6.4 million (+25% YoY)
• Revenue (H1 2026): S\$14.5 million (+53% YoY)
• Profit from Continuing Operations (2Q 2026): S\$0.94 million (vs S\$62,000 in 2Q 2025)
• Profit from Continuing Operations (H1 2026): S\$1.16 million (vs loss of S\$195,000 in H1 2025)
• Total Net Profit (H1 2026): Loss of S\$6.4 million (due to discontinued operations disposal)
• Earnings per Share (EPS, Continuing): 1.15 cents (2Q), 1.40 cents (H1)
• Net Asset Value per Share: 63.13 cents (Group), 56.21 cents (Company)
• Cash and Cash Equivalents: S\$46.0 million (up S\$8.3 million from prior year)
• Share Capital: Reduced to S\$36.5 million via S\$11 million capital reduction

Quarterly and Yearly Comparison Table

Performance Trends

• Revenue Growth: Strong YoY growth, driven by higher trading orders and increased supply of roofing solutions.
• Profitability: The Group swung from a net loss in H1 2025 to a net profit in H1 2026 for continuing operations, primarily due to increased sales and other income.
• Cash Position: Cash and equivalents rose sharply following the disposal of a subsidiary and customer collections.
• Share Capital: S\$11 million reduction via cash distribution after the disposal of Compact Energy Sdn Bhd (“CESB”).
• Discontinued Operations: Disposal of CESB resulted in a one-off net loss of S\$7.5 million, mainly due to the realization of foreign currency translation losses and loss on sale.

Exceptional Earnings and Expenses

• CESB Disposal: The Group completed the sale of its subsidiary, CESB, resulting in a loss of S\$7.4 million (including a S\$9.3 million foreign currency translation loss).
• Other Income Spike: Recovery of CESB’s trade receivables and exchange gains contributed to a significant rise in other income.
• Professional Fees: Higher professional and logistics costs linked to disposal and trading activities increased “Other Expenses”.

Related Party Transactions

• Significant sales of mining equipment to Lion Mining Sdn. Bhd. (S\$3.0 million) and sales of lime products to Amsteel Mills Sdn. Bhd. (S\$342,000) were reported. Both are related parties through a major shareholder/director.

Corporate Actions & Asset Sales

• Divestment: Full disposal of CESB, with net cash inflow of S\$10.9 million after deducting cash balances in the subsidiary.
• Capital Reduction: S\$11 million distribution to shareholders, reducing share capital to S\$36.5 million.

Dividend

• No dividends declared or recommended for the current or previous periods. The board states the need to conserve cash for future operations.

Balance Sheet Highlights

• Total Assets: S\$64.1 million as of 31 December 2025
• Total Liabilities: S\$11.6 million
• Shareholders’ Equity: S\$52.4 million
• Borrowings: Increased to S\$6.4 million, reflecting higher working capital needs for the roofing business.

Outlook and Risks

• The Group notes ongoing economic uncertainty, competitive pressures in the roofing market, and emphasizes focus on cost management, operational efficiency, and customer relationships.
• The company is exploring new investment opportunities to enhance shareholder value, but no forecasts are provided.

Conclusion & Investment Recommendations

Overall Assessment: The Group’s financial performance for continuing operations in H1 FY2026 appears strong relative to the previous year, with robust revenue growth, improved profitability, and a healthy cash position due to asset divestment. However, the one-off disposal of CESB resulted in a significant net loss for the half-year, which overshadows otherwise positive operating metrics.

For Current Shareholders:
Hold: Given the strong operating results, improved cash position, and management’s focus on operational efficiency, investors currently holding Lion Asiapac may consider holding their position. However, they should monitor for further reinvestment of the cash proceeds and management’s ability to generate sustainable profits post-divestment.

For Prospective Investors:
Watch & Wait: While the company’s core business has rebounded, the impact of the divestment and absence of dividends may dampen immediate upside. Potential investors should wait for greater clarity on the Group’s reinvestment plans and sustained profitability before entering.

Disclaimer: This article is strictly based on the company’s unaudited financial report and does not constitute financial advice. Investors should further review the company’s strategy, risks, and market conditions before making investment decisions.