TSH Corporation Limited: 1H2025 Financial Analysis

TSH Corporation Limited, a Singapore-based operator in the premium food and beverage sector, has released its unaudited condensed interim financial statements for the six months ended 30 June 2025. The following analysis presents key financial metrics, performance comparisons, and strategic highlights for investors.

Key Financial Metrics and Performance Table

*Inferred that previous half-year and same period last year are the same, since only half-year data is provided.

Historical Performance Trends

The Group has demonstrated a consistent increase in revenue and profitability over the comparable periods. The 1H2025 revenue rose 9.0% YoY, primarily due to stronger outlet and pre-order sales. Gross profit increased by 7.4% YoY, although gross margin declined slightly to 74.2% (from 75.4%), attributed to more promotional activity. Net profit surged by 60.1% YoY, driven by higher gross profit, lower operating and finance costs, offset by slightly higher administrative expenses and lower other income.

Exceptional Earnings and Expenses

• Waiver of Related-Party Debt: A notable exceptional item is the waiver of an interest-free advance of \$0.64 million from Non-Executive Non-Independent Director and Controlling Shareholder Mr. Teo Kok Woon. This waiver was credited directly to revenue reserve, boosting equity for the period.
• Government Grants: Other income decreased by 52.1% due to a reduction in government grants and supplier sponsorships.

Balance Sheet Insights

• Assets: Non-current assets declined by 13.8% to \$1.51 million, mainly due to depreciation of right-of-use assets and plant/equipment. Current assets increased by 2.0% to \$12.59 million, driven by higher inventories and receivables, offset by lower cash balances.
• Liabilities: Current liabilities dropped by 18.7% to \$3.67 million, primarily due to the waiver of shareholder advances, repayment of borrowings, and lower lease liabilities. Non-current liabilities decreased by 23.5% as a result of repayments, partially offset by new lease liabilities from renewed leases.
• Net Asset Value: NAV per share rose from 19.37 cents to 21.79 cents, reflecting the improved financial position and the impact of the debt waiver.

Dividend Policy

• No interim dividend was declared for 1H2025. The decision was attributed to the Group’s working capital requirements.
• No dividend was declared for the previous period either, indicating a conservative capital management approach.

Related-Party Transactions

• No general mandate for interested person transactions (IPTs) is in place. The only significant IPT was the waiver of \$0.64 million advance, with no adverse impact on the Group.

Events and Strategic Outlook

• Strategic Expansion: The Group entered a cooperation agreement to operate a cigar bar and lobby lounge in Tianjin, China, which may offer future growth opportunities.
• Industry Challenges: The company continues to face rising operating costs and manpower constraints but aims to grow revenue through new channels and marketing efforts.
• No Divestments, Fundraising, or Share Buybacks: There were no share transactions, buybacks, asset sales, or fundraising activities in the period.
• No Significant Legal or Policy Events: No legal disputes, court cases, or policy changes were reported.

Chairman’s Statement and Tone

“The Group is in the premium lifestyle business, focusing on providing unique experience in relation to alcohol beverages to the customers. The Group will continue to step up the sales and marketing efforts and find new channels to grow its revenue while managing the rising operating costs and manpower constraints. Additionally, the Group is constantly exploring opportunities, locally and overseas, to expand its foothold organically or via joint ventures or strategic alliances with parties that can complement the Group’s business. As part of these efforts, the Group has entered into a co-operation agreement with Perennial Hotel Management (Tianjin) Co., Ltd and Perennial (Tianjin) Commercial and Trading Co., Ltd in relation to the operation and management of the cigar bar and lobby lounge at the hotel cluster within Perennial Tianjin South High Speed Railway International Healthcare and Business City (“Co-operation”) as announced on 25 July 2025. Further updates in relation to the Co-operation will be made as and when appropriate.”

The tone of the statement is cautiously optimistic, reflecting a proactive approach to growth and cost management, while acknowledging operational challenges in the current environment.

Conclusion and Investment Recommendations

Overall Financial Performance: The Group’s financial performance in 1H2025 is strong, marked by robust revenue and profit growth, improved asset position, and prudent cost management. The exceptional gain from the related-party debt waiver provides a one-off boost to equity, but underlying operating metrics also show positive trends.

For Current Shareholders: Consider holding the stock. The company demonstrates growth in core metrics, maintains a healthy balance sheet, and is pursuing strategic expansion opportunities. The absence of dividends may be a concern for income-focused investors, but reinvestment into business operations and international expansion could drive long-term value.

For Potential Investors (Non-Holders): TSH Corporation Limited presents a compelling growth story, but caution is warranted due to the lack of dividends and the inherent risks of overseas expansion and rising costs. It may be suitable for investors seeking exposure to the premium F&B sector and willing to accept medium-term volatility. Consider accumulating on price dips or after further clarity on the Tianjin expansion.

Disclaimer: This analysis is based solely on information contained in the company’s official financial report for 1H2025. It does not constitute financial advice. Investors should conduct their own due diligence and consider their risk tolerance before making investment decisions.

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