Tat Seng Packaging Group Ltd: FY2025 Financial Results Analysis
Tat Seng Packaging Group Ltd, a leading manufacturer and seller of corrugated paper and packaging products in Singapore and China, has released its condensed interim financial statements for the full year ended 31 December 2025. This article provides a comprehensive analysis of the Group’s key financial metrics, performance trends, dividend policy, and outlook, to assist investors in making informed decisions.
Key Financial Metrics and Performance Overview
| Metric |
2H 2025 |
1H 2025 |
2H 2024 |
FY2025 |
FY2024 |
YoY Change (FY) |
QoQ Change (2H) |
| Revenue (\$’000) |
120,307 |
111,099 |
126,696 |
231,406 |
253,938 |
-8.9% |
-5.0% |
| Net Profit Attributable to Owners (\$’000) |
9,793 |
7,094 |
8,699 |
16,887 |
18,825 |
-10.3% |
+12.6% |
| EPS (cents) |
6.23 |
4.51 |
5.53 |
10.74 |
11.98 |
-10.4% |
+12.7% |
| Gross Profit (\$’000) |
25,586 |
22,809 |
28,331 |
48,395 |
56,478 |
-14.3% |
-9.7% |
| Total Dividend per Share (cents) |
0.45* (proposed) |
0.01 (interim paid) |
0.03 (final paid) |
0.45* (proposed) |
0.06 |
+650% |
N/A |
* Dividend for FY2025 includes interim (S\$0.01), final (S\$0.05), and a special dividend (S\$0.34) per share, subject to shareholders’ approval.
Historical Performance and Trends
- Revenue: Declined 8.9% year-over-year due to lower sales volume and competitive pricing in both Singapore and China. Notably, China’s operations saw a 9.1% drop in revenue, also impacted by a weaker RMB versus SGD.
- Profitability: Net profit attributable to owners decreased by 10.3% from the prior year, driven mainly by reduced gross margins. However, second-half profit improved 12.6% quarter-on-quarter, reflecting some cost discipline and operational efficiency.
- Gross Profit Margin: Gross profit fell 14.3% YoY, highlighting margin compression from pricing pressures and lower volumes.
- Expenses: General and administrative expenses fell by 11.7% YoY, mainly from lower staff bonus provisions and reduced staff costs.
- Other Expenses: Significant decrease primarily due to a one-off provision in 2024 related to steam usage at Hefei, not repeated in 2025.
- Finance Income: Net finance income rose 44.8% YoY, thanks to higher gains on financial assets and dividends, despite lower interest income from fixed deposits.
Dividend Policy and Payouts
Tat Seng Packaging announced a substantial increase in total dividends for FY2025, proposing S\$0.45 per share (including a special dividend of S\$0.34), up from S\$0.06 in FY2024. The final and special dividends are subject to shareholder approval.
Balance Sheet Strength
- Net Asset Value (NAV): NAV per share rose to S\$1.35 at 31 Dec 2025 from S\$1.29 a year earlier, reflecting retained profits.
- Cash and Cash Equivalents: Cash rose to S\$110.2 million, with net cash (excluding pledged deposits) at S\$102.0 million, an increase of S\$12.2 million over the year, supported by robust operating cash flow.
- Borrowings: Total loans and borrowings (current and non-current) declined marginally by S\$0.3 million.
- Capital Investments: The Group invested S\$10.6 million in property, plant and equipment during the year, with commitments of S\$1.3 million outstanding at year-end.
Exceptional Items and Related-Party Transactions
- A one-off reversal of provision related to steam usage at Hefei was recorded in FY2025, positively impacting other income and lowering other expenses.
- Related-party transactions were disclosed, including significant purchases and sales with an associate of a director (Tee Yih Jia Food Manufacturing Pte Ltd: S\$1.35 million in transactions).
Management Commentary and Outlook
Industry Environment: The management highlighted that excess capacity in China’s corrugated packaging industry continues to create intense price competition. Margin pressures may persist, especially if raw material prices rise further.
Strategy: The Group plans to focus on cost management, operational efficiency, and automation, while deepening engagement with key customers to create new business opportunities.
The excess capacity situation continues to dominate the corrugated packaging industry in China, exacerbating the intense price competition situation. These factors, combined with any increase in raw material prices could have a direct impact on our performance and margins. The Group will closely monitor market conditions and focus on cost management, efficiency improvement and automation initiatives across our operations to overcome the challenging operating environment. Concurrently, we will also deepen engagement with key and potential customers to strengthen collaboration and generate new business opportunities.
The tone of the outlook is cautious, with management clearly signaling ongoing challenges but also a proactive approach to adapting.
Conclusion and Investor Recommendations
Summary: Tat Seng Packaging delivered a resilient performance in a tough market, with notable margin pressures and declining revenue. However, the Group’s cost controls, strong cash generation, and a dramatically increased dividend (including a special payout) provide support for shareholder value. The balance sheet remains robust, with ample cash and manageable debt.
For Current Shareholders: The special dividend and increased payout reward shareholders despite a challenging operating environment. Investors already holding the stock may consider maintaining their positions to benefit from the substantial dividend payout and the company’s solid financial footing, while monitoring for signs of margin recovery or further pressure.
For Prospective Investors: While the stock offers an attractive dividend yield in the near term, prospective investors should weigh ongoing industry headwinds. Entry may be considered for income-focused investors, but with awareness of potential future earnings volatility due to sector overcapacity and raw material cost risks.
Disclaimer: This analysis is based solely on information contained in the company’s published financial report. It does not constitute investment advice. All investments carry risk; readers are advised to conduct their own research or consult a professional advisor before making investment decisions.
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