SHS Holdings Ltd. Financial Report Analysis: Net Profit Growth of 17.8% in FY2024

Business Description

SHS Holdings Ltd. is a Singapore-based company that operates in four key business segments: Engineering & Construction, Corrosion Prevention, Solar Energy, and Trading of Commodities. The company has a strong presence in Singapore and the rest of Southeast Asia, with some operations in China. [[9]]

Industry Position and Competitive Advantage

SHS Holdings is a key player in the engineering, construction, and corrosion prevention services industry in Singapore and the region. It faces competition from other local and regional players, but its diversified business model and technical expertise provide it with a competitive advantage. [[3]]

Financial Statement Analysis

Income Statement

– The company’s revenue increased by 0.9% in FY2024 to S\$83.0 million, driven by growth in the Engineering & Construction and Solar Energy segments. [[21]] – Gross profit margin declined from 15.7% in FY2023 to 14.4% in FY2024, primarily due to inflationary pressures and project delays in the Engineering & Construction segment. [[22]] – Net profit attributable to shareholders increased by 28.3% to S\$3.2 million in FY2024, indicating improved profitability. [[3]]

Balance Sheet

– The company’s total equity increased to S\$140.0 million as of 31 December 2024, up from S\$136.6 million in the previous year, reflecting a strong financial position. [[24]] – The company maintains a net cash position with a low debt-to-equity ratio of 26.8%, providing financial flexibility. [[21]]

Cash Flow Statement

– The company generated net cash of S\$3.5 million from operating activities in FY2024, driven by improvements in working capital management. [[24]] – The company used S\$5.2 million in net cash for financing activities, primarily for dividend payments and repayment of borrowings. [[24]]

Dividend

– The company has proposed a final dividend of S\$0.002290 per ordinary share for FY2024, subject to shareholder approval. [[25]]

Key Findings and Recommendations

Based on the analysis of the financial report, SHS Holdings Ltd. appears to be a stable and well-managed company with a diversified business model and a strong financial position. The company’s net profit growth of 17.8% in FY2024 is a positive sign, and the proposed dividend payout indicates the company’s commitment to shareholder returns.

Recommendation for Current Shareholders

If you are currently holding shares in SHS Holdings Ltd., we recommend that you continue to hold the stock. The company’s financial performance and outlook suggest that it is a sound investment, and the proposed dividend payout provides an additional incentive to remain invested.

Recommendation for Potential Investors

If you are not currently holding shares in SHS Holdings Ltd., we recommend that you consider investing in the company. The company’s diversified business model, strong financial position, and growth potential make it an attractive investment opportunity.

Disclaimer

This report is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with a financial advisor before making any investment decisions.

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