Hafary Holdings Acquires Shanghai Subsidiary and Strikes Off Marble Trends: Key Details for Investors

Major Developments for Hafary Holdings Limited: Shanghai Expansion and Subsidiary Rationalisation

Hafary Holdings Limited (SGX: 5VS), a leading supplier of premium tiles, stones and building materials in Singapore, has made two significant corporate moves in the first half of its financial year ending 31 December 2025, both of which may have implications for shareholders and could influence the company’s share price.

1. Strategic Acquisition in Shanghai – A Step into China’s Lucrative Market

• Full Acquisition of MML (Shanghai) Trading Co., Ltd.
  On 3 January 2025, Hafary Holdings, via its wholly-owned subsidiary Hafary Shanghai Pte Ltd, completed the purchase of a 100% stake in MML (Shanghai) Trading Co., Ltd. from Malaysian Mosaics Sdn. Bhd. (MMSB). The deal was closed for RMB 15 million (approximately S\$2.8 million), which represents 2.37% of Hafary Holdings’ latest audited net tangible assets at the time of the transaction.
• Valuation and Performance of MML (Shanghai)
  The acquisition price was based on a willing-buyer, willing-seller basis, with consideration given to the forecasted net asset value and profit after tax for FY2024. MML (Shanghai) delivered an actual profit after tax of RMB 4.38 million and had an audited net asset value of RMB 15.05 million as of 31 December 2024. This is a strong recent performance and may boost Hafary’s consolidated earnings.
• Immediate Payment – All Cash Deal
  The acquisition was fully settled in cash, reflecting Hafary’s strong liquidity position and confidence in the Shanghai subsidiary’s prospects.
• Related Party Transaction – What Investors Should Note
  MMSB is a wholly-owned subsidiary of Hafary’s controlling shareholder, Hap Seng Consolidated Berhad (HSCB). Key Hafary directors, Datuk Edward Lee Ming Foo and Ms Cheah Yee Leng, hold senior positions at HSCB and its holding company. In compliance with Singapore’s Code of Corporate Governance 2018, these directors abstained from voting and deliberation on the acquisition to avoid conflicts of interest.
• No Immediate Announcement Requirement
  Since the consideration was less than 3% of Hafary’s latest net tangible assets, the transaction did not trigger immediate disclosure obligations under SGX Listing Manual’s Chapter 9. Likewise, the relative figures under Rule 1006 of Chapter 10 did not exceed 5%, so it is not classified as a discloseable transaction. However, investors should be aware that this move strengthens Hafary’s presence in the Chinese market, which could have a positive impact on its future growth and share value.
• Potential Share Price Implications
  The acquisition of a profitable Chinese entity could be seen as a strategic move, providing entry into a large, fast-growing market. Given MML (Shanghai)’s profitability, investors may view this as accretive to Hafary’s earnings and a catalyst for greater regional expansion.

2. Rationalisation of Subsidiary Structure – Striking Off Marble Trends Pte. Ltd.

• Streamlining Operations
  Hafary Holdings has struck off its subsidiary, Marble Trends Pte. Ltd., from the company register. This is part of the Group’s ongoing efforts to streamline its operations and focus on core businesses.
• Immaterial Financial Impact
  The strike-off is not expected to materially affect the company’s earnings per share or net tangible assets per share for the financial year ending 31 December 2025. This suggests that Marble Trends was either dormant or contributed only marginally to the Group’s financials.
• No Director/Shareholder Conflict
  Other than their respective indirect interests through shareholdings or directorships in Hafary, none of the directors or controlling shareholders has any direct or indirect interest in the strike-off.

What Should Retail Investors Watch?

• The acquisition of MML (Shanghai) could be a game-changer for Hafary, giving it a foothold in China’s building materials market – a sector with significant growth potential. Investors should monitor subsequent earnings reports to gauge the impact of this deal on group profitability and overall strategy.
• The strike-off of Marble Trends Pte. Ltd. is a housekeeping exercise, with no impact on earnings or assets, and should not move the share price.
• The fact that related directors abstained from voting on the Shanghai acquisition demonstrates good governance, but shareholders should remain vigilant about transactions involving related parties.

Conclusion

Hafary Holdings’ latest moves reflect a strategy of expansion into high-potential markets and operational streamlining. The Shanghai acquisition, in particular, could be a catalyst for future growth and may positively influence share price as more details emerge about integration and performance. Retail investors should keep a close eye on Hafary’s upcoming financial statements for any indication of earnings boost from this new subsidiary.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors are encouraged to conduct their own due diligence and consult with professional advisors before making any investment decisions related to Hafary Holdings Limited.

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