Miyoshi Limited AGM Report 2026: Key Highlights for Investors

Audit Delays and Valuation of Core Power Investment

• Audit Completion Delay: The FY2025 audit review was completed in early February 2026, notably later than usual. The main reason was the delay in the issuance of the valuation report for Core Power (Fujian) Electric Co., Ltd., an investment in China.
• Core Power Valuation: Miyoshi Limited holds a significant 42% stake in Core Power, which continues to carry substantial outstanding liabilities. Historically, this investment was valued at zero as Core Power’s assets were insufficient to cover its debts, even if liquidated.
• Current Year Valuation: Although real estate prices in China increased slightly, both Management and the external auditors agreed that Core Power’s asset value remains insufficient to cover its liabilities. The company sought a second independent valuation, contributing to the audit delay.
• Sale Plans: Management confirmed there are no plans to invest further in Core Power. Efforts are ongoing to find buyers for Miyoshi’s stake, but interest has been limited.

Operational and Property Strategy

• Disposal of Johor Bahru Properties: Miyoshi completed the sale of two properties in Johor Bahru, Malaysia, during the year.
• Operational Properties: Properties in Thailand and the Philippines are operational and house manufacturing plants. Management clarified there are no current plans to sell these assets, as ongoing business operations are based there.
• Rental Income Impact: Rental income decreased by \$400,000 due to tenant departure, but a new automotive-related tenant has been secured under a five-year lease beginning January 2026.

Business Outlook and Segment Focus

• Challenging Manufacturing Environment: Management highlighted persistent margin pressures and is actively seeking ways to rejuvenate the business.
• Industry Segments: Miyoshi operates in three segments: data storage, consumer electronics, and automotive. Post-COVID, the data storage segment has reached its end-of-life and is no longer directly supported.
• Automotive Segment Growth: The automotive segment now represents Miyoshi’s primary revenue stream, with major customers including Continental.
• New Industry Exploration: The company is exploring opportunities in smart hardware, particularly related to electric vehicles (EVs) and 3D printing.
• No AI Exposure: Miyoshi confirmed it does not operate in the AI industry.

Financial Management and Receivables

• Funds Held in Trust: Proceeds from the disposal of the Skudai plant in Malaysia are being held in trust by a director, Mr. Andrew Sin, and placed in a fixed deposit earning 3.8% interest. Payments to suppliers are ongoing, and approximately \$300,000 remains in the trust as of the reporting date.
• Loan to Former Employee: A previously impaired unsecured loan to a former employee was partially repaid in 2025. The loan supported business operations at Miyoshi Precision (Malaysia) Sdn. Bhd.
• Loss Allowances: Loss allowance for non-trade receivables and investments in subsidiaries are re-evaluated each reporting period in accordance with accounting standards, reflecting the recoverable value of these assets.

Currency and Regulatory Considerations

• Currency Translation Reserve: Foreign exchange fluctuations from overseas investments impact Miyoshi’s currency translation reserve, posing a risk for international investments.
• China Remittance Process: Profits from China can be repatriated to Singapore via dividend declarations but are subject to withholding tax between 5% and 10%.

Corporate Governance

• Director Contributions: Directors bring diverse skill sets: Mr. Lo Kim Seng (legal), Mr. Pek Ee Perh, Thomas (business), and Mr. Low See Lien (accounting).
• Directors’ Fees: Fees remain unchanged and are allocated to Mr. Lo, Mr. Pek, and Mr. Low.
• Audit Partner Tenure: Audit partner, Mr. Titus Kuan Tjian, is serving his third year with Miyoshi.
• Finance Leadership: Mr. Law Kar Weng, Assistant Finance Manager, has been in charge for 10 months, following the departure of the previous Financial Controller due to health issues.
• Annual Report Distribution: Shareholders can request hard copies of the Annual Report via a form published on the SGX-ST website.
• No Regulatory Fines: Miyoshi was not fined by SGX-ST for non-disclosure of impairment losses.

Potential Price-Sensitive Issues for Investors

• Core Power Investment: Continued zero valuation and lack of buyers for Miyoshi’s 42% stake in Core Power are a concern. Any change in valuation or successful sale could impact share price.
• Operational Property Sales: While management currently has no plans to sell properties in Thailand and the Philippines, such sales could significantly affect financials and share value.
• Shift to Automotive Segment: The strategic focus on automotive and related industries (EVs, 3D printing) may signal future growth and revenue stabilization, which could be positive for share price.
• Rental Income Recovery: The new tenant in the automotive sector may improve future rental income, supporting cash flow.
• Funds Management and Debt Repayment: Careful management of proceeds and debt repayment suggests prudent financial stewardship, though delays in remittance may pose short-term liquidity risks.

Disclaimer: The above article is based on public disclosures and discussions at Miyoshi Limited’s 2026 AGM. It is intended for informational purposes only and does not constitute financial advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult professional advisors before making investment decisions.

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