Broker: KGI Securities (Singapore) Pte. Ltd.
Date of Report: April 6, 2026
Excerpt from KGI Securities (Singapore) report.
Report Summary
- Stock: Infinity Development Holdings Co Ltd (IDH SP/ZBA.SI)
- Action: OUTPERFORM (Initiation)
- Target Price: S\$0.62
- Current Price (as of April 2, 2026): S\$0.40
- Upside (including dividends): 63.1%
- Key Investment Highlights:
- Infinity is a specialty chemical manufacturer supplying adhesives, primers, and hardeners for footwear production, with a highly sticky business model due to dual-approval requirements by both global brands and OEMs.
- High switching costs and long qualification cycles result in entrenched supplier positions and defensive earnings, even in volatile environments.
- 88% of revenue is from ASEAN (mainly Vietnam and Indonesia), well-positioned to benefit from ongoing migration of footwear manufacturing out of China.
- Balance sheet is very strong: net cash of HK\$288.5mn (~35% of total assets) and no structural debt, supporting organic expansion and downside protection.
- Near-term margin pressure is expected due to higher petrochemical, freight, and manufacturing costs stemming from the Middle East conflict, but customer stickiness supports continued demand.
- DCF-based valuation uses a WACC of 8.03% and a conservative risk assessment; peer multiples considered less relevant due to Infinity’s focused business model.
- Key Risks: Customer concentration, cyclicality in OEM production, raw material cost volatility, regulatory compliance, execution risk in Indonesia expansion, and FX/macro exposure.
IDH SP | Action: OUTPERFORM | Target Price: S\$0.62
above is an excerpt from a report by KGI Securities (Singapore) Pte. Ltd. Clients of KGI Securities (Singapore) Pte. Ltd. can be the first to access the full report from the KGI Securities website : https://www.kgieworld.sg
