HGH Holdings Ltd. 1H 2025 Results: Revenue Surge, Profit Recovery, and Cautious Optimism

HGH Holdings Ltd., a Singapore-listed company involved in leasing, manufacturing of precast and ready-mix concrete, and civil engineering works, has released its unaudited financial results for the half year ended 30 June 2025. The group delivered robust revenue growth and returned to profitability, driven by the commencement of new production capacity and delayed project execution. This article analyzes the key financial highlights, performance trends, and outlook based solely on the published report.

Key Financial Metrics: 1H 2025 vs 1H 2024

Performance Overview and Segment Analysis

• Revenue: HGH recorded a sharp revenue increase of 183.7% YoY, reaching S\$24.1 million for 1H 2025. This was mainly attributed to the new ready-mix concrete plant coming online, commencement of previously delayed projects, and increased rental income. The ready-mix segment (Premium Concrete Pte. Ltd.) and underground cable installation (PHH) contributed S\$9.75 million and S\$6.15 million to the growth, respectively, with rental income up S\$0.35 million. The precast segment (WPP) saw a S\$0.63 million decline.
• Profitability: The company swung from a net loss of S\$0.94 million in 1H 2024 to a net profit of S\$1.73 million in 1H 2025. EPS improved from negative to positive territory (0.10 cent per share).
• Margins: Gross profit increased by 138.2% YoY to S\$6.01 million. However, gross margin narrowed from 29.7% to 24.9%, due to a higher revenue contribution from the lower-margin ready-mix concrete business.
• Expenses: Distribution and administrative expenses rose due to higher sales volumes, increased headcount, higher depreciation, and dormitory rentals, partially offset by lower management fees.
• Finance Costs: Finance expenses more than doubled, reflecting higher lease liabilities from new truck additions. Finance income declined due to fewer short-term fixed deposits.
• Taxation: Tax expense rose to S\$0.35 million, mainly from higher taxable profits in the EMS and PC segments, partially offset by deferred tax assets.

Balance Sheet and Cash Flow Insights

• Assets: Total assets grew to S\$75.5 million, with property, plant, and equipment at S\$12.7 million and investment properties at S\$42.6 million, making up 22.3% and 74.9% of non-current assets, respectively.
• Liabilities: Total liabilities rose to S\$27.8 million, mainly from higher trade payables and lease obligations due to new truck leases and project activity.
• Cash Position: Cash and bank balances fell by S\$1.36 million, driven by negative operating cash flow (S\$0.5 million outflow), capital expenditure (S\$1.05 million outflow), and partially offset by net financing inflow (S\$0.2 million).

Segment Revenue Breakdown (1H 2025)

• Leasing & Service Income: S\$5.3 million
• Precast Concrete: S\$0.4 million
• Ready-Mix Concrete: S\$11.7 million
• Underground Cable Installation & Road Reinstatement: S\$6.7 million

Dividends

• No interim dividend was declared for 1H 2025, consistent with the previous period. The company cites the need to conserve cash for working capital purposes.

Exceptional Items and Corporate Actions

• No share buybacks, placements, or asset sales were reported.
• No new subsidiaries, divestments, or fundraising activities during the period.
• No material related-party transactions or interested person transactions above S\$100,000.
• No directors’ remuneration details were disclosed.

Asset Valuation and Revaluation

• Investment properties were last appraised in September 2022 at S\$60 million using the Comparable Sales Method. Management believes there is no material change since then, implying a conservative approach to asset revaluation.

Chairman’s Statement and Management Outlook

“The economic outlook remains uncertain as the world continues to face geopolitical tension, higher tariffs and inflation. Thus, the Group expects a slow recovery in its business activities. However, with the commencement of operations at our new ready-mix concrete plant in the first quarter of 2025, the execution of the underground cable installation contracts on hand as well as stable income from contracted leasing and services segment, we remain cautiously optimistic in relation to the outlook of the group compared to the previous financial year. The Group will continue to exercise prudence in managing operational costs while actively seeking new business opportunities.”

The tone is cautiously optimistic—management acknowledges macroeconomic headwinds but expects ongoing project momentum and new capacity to support performance.

Risks and Exceptional Events

• No new legal disputes, disasters, or policy changes are mentioned.
• Management notes broader macroeconomic risks including geopolitical tensions, tariffs, and inflation.

Conclusion: Assessment & Recommendations

Performance Assessment: HGH Holdings delivered a strong turnaround in 1H 2025, with a sharp rebound in revenue and profitability, supported by new capacity and project execution. However, the drop in gross margins and cash outflows from operations highlight ongoing pressures and the need for prudent cost management.

Investor Recommendations

• If you are currently holding HGH Holdings: The return to profitability and revenue surge are positive, but the lack of dividends and ongoing cash outflows suggest a cautious approach. Investors may consider holding if they are optimistic about continued project execution and the company’s ability to improve margins and cash flow. Watch for any signs of sustained margin erosion or further negative cash flow.
• If you are not currently holding HGH Holdings: The company’s turnaround and new project pipeline may offer upside, but risks remain from margin pressure and macroeconomic uncertainty. Prospective investors should monitor for improved cash conversion and evidence that the company can sustain profitability and growth in a challenging environment before entering a position.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please conduct your own research or consult a professional advisor before making investment decisions.

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