SDAI Limited FY2025 Financial Results Analysis

SDAI Limited, a Singapore-listed company, has released its unaudited condensed interim financial statements for the fourth quarter and full year ended 31 December 2025. This report reflects the company’s ongoing transformation, including a strategic shift into biotechnology and healthcare, as well as efforts to address legacy issues from prior years. Below, we break down the key financial metrics, performance trends, exceptional items, and future outlook as disclosed in the report.

Key Financial Metrics & Comparative Table

Historical Performance Trends

• Revenue: Continued to decline in FY2025 (-16.3% YoY), mainly due to a reduction in residential project and retail segment revenues following the winding down of legacy businesses in Hong Kong.
• Net Loss: Net loss widened significantly (+85.3% YoY) to S\$3.18 million, driven by much lower other income (absence of prior year’s exceptional gains), higher finance costs, and new selling/distribution expenses related to the healthcare business launch.
• Gross Profit: Marginal improvement due to a sharper decline in cost of sales than revenue, but not enough to offset increased operating costs and reduced other income.
• EPS: Deepened loss per share, from (0.36) S\$ cents in FY2024 to (0.75) S\$ cents in FY2025.
• No dividends: No dividend was declared for FY2025, consistent with the previous year.

Exceptional Items & Non-Recurring Events

• 2024 Exceptional Gains Not Repeated: FY2024 included a S\$0.91 million gain on extinguishment of loans due to loan maturity extensions, a S\$0.13 million fair value gain on loans, and a S\$0.15 million net foreign exchange gain. These were absent in FY2025, leading to a sharp drop in other income.
• New Segment Launch: The company launched its proprietary Bluecode Biotech B-III skincare series in Dec 2025 and entered a joint venture for moxibustion products in Jan 2026, marking a pivot into biotechnology and healthcare.
• Impairments: No additional impairment losses on property, plant, and equipment in FY2025, after significant impairments in FY2024.

Errors, Audit Issues, and Compliance Matters

• Disclaimer of Opinion: The latest audited financials for FY2024 received a disclaimer of opinion from auditors, linked to going concern assumptions and ongoing compliance with SGX RegCo notices. Management is actively working to resolve these issues.
• Special Audit & Regulatory Action: The company underwent a special audit due to regulatory concerns, with specific directives issued by SGX RegCo to improve internal controls and address historical weaknesses.

Balance Sheet and Liquidity

• Negative Equity: Total equity stands at negative S\$10.34 million, down from negative S\$7.43 million the previous year, reflecting accumulated losses.
• Working Capital Deficit: The company is in a negative working capital position of S\$10.49 million, up sharply from a deficit of S\$0.53 million a year ago, mainly due to borrowings reclassified as current liabilities and increased payables.
• Cash Position: Cash and cash equivalents at year-end were S\$0.72 million, essentially unchanged from the previous year. Operating cash outflow for FY2025 was S\$2.03 million, offset by S\$2.06 million in net financing inflows.
• Debt Structure: The company renewed and drew down multiple short-term, interest-free, and redeemable loans, with new maturity dates in June 2026. Some loans contain equity conversion options linked to potential resumption of trading.

Chairman’s Statement & Tone

“On behalf of the board of directors of the Company, we, the undersigned, hereby confirm to the best of our knowledge, nothing has come to the attention of the board of directors of the Company which may render the unaudited condensed interim consolidated financial results for the Group for the fourth quarter and twelve months period ended 31 December 2025 to be false or misleading in any material aspect.” — Hao Dongting, Executive Chairperson, 16 February 2026

The tone is formal and procedural, with no explicit positive or negative outlook. The statement emphasizes regulatory compliance and the accuracy of the reported results, but does not provide forward-looking optimism or caution.

Corporate Actions and Strategic Developments

• Business Pivot: The company exited legacy residential and retail segments in Hong Kong and commenced operations in biotechnology and healthcare, including a proprietary skincare line and a joint venture for moxibustion products in the ASEAN region.
• Fundraising and Loan Renewals: Multiple loans were renewed or newly entered, with some containing equity conversion options. The company is pursuing new business opportunities to generate additional revenues and support restructuring efforts.
• No Dividends: No interim or final dividend declared; the company continues to report accumulated losses.
• No Share Buybacks or Mandates: No mention of share buybacks or dilution in the period.
• No Director Pay Details: Directors’ fees for the year were S\$250,000, unchanged from the prior year.

Risks, Uncertainties, and Outlook

• Going Concern Risk: The company’s ability to continue as a going concern depends on successful execution of its turnaround and restructuring plans, generating sufficient sales from new ventures, securing new financing, and/or converting debt to equity.
• Regulatory Compliance: Ongoing engagement with SGX RegCo and implementation of special audit recommendations is critical for potential resumption of trading and future stability.
• Macroeconomic and Sector Risks: The company faces sector risk in both its legacy kitchen business (now wound down) and new healthcare ventures, which are in early stages and unproven at scale.

Conclusion & Investment Recommendations

Overall Assessment: The financial performance of SDAI Limited remains weak, with deepening losses, negative equity, ongoing working capital deficits, and significant regulatory uncertainties. While the business pivot to biotechnology and healthcare offers potential upside, these new ventures are in their infancy and have yet to demonstrate sustainable revenue or profitability. The company’s ability to continue as a going concern is subject to successful restructuring, market acceptance of new products, and favorable regulatory outcomes.

Investor Recommendations

• If you currently hold the stock: Exercise caution. The company faces material financial and regulatory risks. Consider reviewing your investment thesis in light of the deepening losses, negative equity, and the unproven new business lines. If your risk tolerance is low or you require liquidity, you may wish to reduce exposure. However, if you believe in the long-term potential of the new healthcare initiatives and are willing to accept high risk, continued holding could be justified as a speculative position.
• If you are not currently holding the stock: It is advisable to remain on the sidelines until the company demonstrates consistent revenue growth and profitability from its new ventures, resolves regulatory issues, and achieves a stable financial footing. There is currently insufficient evidence of turnaround success or reduced risk to warrant new investment.

Disclaimer: This analysis is based solely on the company’s FY2025 financial report. It does not constitute investment advice. Investors should consider their own risk tolerance and conduct further due diligence or consult a licensed financial advisor before making any investment decisions.

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