Serial Achieva Limited (Labuan, Malaysia): 1H2025 Financial Analysis

Serial Achieva Limited, listed on the Catalist Board of the Singapore Exchange, has released its unaudited condensed interim financial statements for the half year ended 30 June 2025. The company and its subsidiaries are engaged in the distribution and marketing of information technology products, peripherals, and related services with principal operations in Malaysia and a newly launched segment in Thailand.

Key Financial Metrics

Performance Highlights and Trends

• Surge in Revenue: Revenue increased substantially to \$49.6 million (+153% YoY), mainly driven by the commencement of the Thailand segment, which contributed \$20.8 million. The Malaysia segment grew 47% due to robust demand for desktop CPUs, VGA cards, motherboards, and laptops.
• Gross Profit and Margins: Gross profit more than doubled, margin improved slightly (3.4% vs. 3.0%), reflecting better product mix and strong consumer demand in Malaysia.
• Operating Income: Other operating income rose to \$0.7 million (vs \$0.2 million), largely from \$0.5 million net foreign exchange gains due to USD depreciation against Thai Baht. In the previous period, a \$0.2 million FX loss was recorded.
• Expenses: Distribution, administrative, and other expenses increased sharply, reflecting the Thailand segment’s ramp-up (higher staff, promotion, management fees), and increased corporate office costs.
• Finance Costs: Finance expenses increased by 33% to \$0.22 million, linked to higher use of bank facilities to support inventory and sales growth.
• Net Loss: Despite improved revenue and margins, the group reported a net loss of \$0.36 million, a significant improvement from a \$5.08 million loss in 1H2024. The prior year included exceptional losses related to a reverse takeover and introducer fees (\$4.6 million).

Balance Sheet and Cash Flow

• Assets: Cash and cash equivalents dropped to \$3.07 million from \$5.04 million at year-end 2024, as working capital was tied up in inventories and receivables.
• Receivables: Trade and other receivables decreased by \$7.6 million, mainly due to payments from a now-closed Singapore subsidiary, partly offset by higher Thailand sales.
• Inventories: Rose by \$4.3 million to \$16.3 million, reflecting inventory buildup in Thailand to support new sales channels.
• Liabilities: Trade and other payables dropped by \$7.1 million; borrowings increased by \$1.3 million (to \$7.3 million), used to finance inventory for anticipated demand.
• Net Gearing: Rose significantly to 100% (vs 22% at end-2024), mainly on higher borrowings and lower cash balances.
• Operating Cash Flow: Positive at \$1.0 million, driven by collections on receivables and higher payables to related companies, offset by inventory purchases and operating losses.
• Financing Cash Flow: Outflow of \$3.2 million, mainly due to repayments to related companies and interest payments, offset by new net borrowings.

Exceptional Items

• 1H2024 Exceptional Losses: The previous period included a \$4.2 million one-off accounting loss on completion of the reverse takeover and \$0.4 million introducer fee paid in shares. These did not recur in 1H2025.

Related Party Transactions

• Significant purchases from related companies (Serial I-Tech and Serial Microelectronics) totaling over S\$31.9 million in 1H2025, under an IPT mandate renewed at the April 2025 AGM.
• Management fee expenses to holding company (Serial System Ltd) were S\$97,000.

Corporate Actions and Share Capital

• No share issuance, buybacks, or dividends in 1H2025.
• Net proceeds of S\$1.85 million from a compliance placement in June 2024 are being deployed for ASEAN business expansion, operational upgrades, and working capital. As of the reporting date, S\$336,000 remains unused.
• In July 2025, the company incorporated Achieva Cloud Services Pte. Ltd. in Singapore for data center services—indicating strategic diversification.

Industry Outlook and Management Commentary

Management characterizes the current environment as highly competitive and challenging, citing inflationary pressures, cautious consumer sentiment, and the rise of e-commerce. The group is expanding its product portfolio, especially in gaming, cloud storage, and AI, and is planning regional expansion into Vietnam, Indonesia, and the Philippines via partnerships and acquisitions. Specific risks being monitored include currency volatility, supply chain disruptions, and trade tariffs. No interim dividend has been declared due to ongoing losses and accumulated deficits.

Conclusion

Serial Achieva Limited delivered a much-improved operational performance in 1H2025, with triple-digit revenue growth and sharply reduced losses, driven by the successful launch of its Thailand segment and robust Malaysian demand. However, the company remains loss-making, with rising expenses to support expansion and a substantially higher net gearing ratio reflecting increased debt. The absence of dividends and accumulated losses suggest a continued focus on reinvestment and recovery. Management’s outlook is cautiously optimistic, prioritizing diversification and regional growth, but external risks remain material. Overall, the results indicate a positive operational turnaround, but financial strength and sustainability will depend on executing growth plans and restoring profitability in the coming periods.

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