Addvalue Technologies Ltd: 1H2026 Financial Analysis and Investor Insights

Addvalue Technologies Ltd, a Singapore-based provider of satellite communications products and services, has released its unaudited condensed interim financial statements for the first half ended 30 September 2025 (1H2026). The report shows significant improvements in key financial metrics, driven by strong performances in its ADR and SPC business segments. Below, we breakdown the numbers and discuss the implications for investors.

Key Financial Metrics and Performance Table

Historical Performance Trends

The Group has shown a strong turnaround in 1H2026, with revenue surging 54% YoY and gross profit rising 64%. Net profit for the period was \$1.98 million, a remarkable increase from \$52,000 in the prior year period. EBITDA also saw a substantial increase, supported by a higher gross profit margin (52% vs 48% in 1H2025) due to a favorable product mix. The working capital position and net asset value per share both improved, with gearing dropping from 55.8% to 29.5% in the period.

Business Segments Performance

• ADR-Related Business: Dominated revenue with \$5.03 million (57% of total), continuing its strong market traction.
• SPC-Related Business: Showed significant YoY improvement, contributing \$3.20 million (37% of revenue).
• STC and SDS Businesses: Accounted for the remaining 6% of revenue, with SDS seeing a decrease compared to last year.

Share Capital Movements and Dilution

The company increased its share base during the period due to conversion of convertible loan notes, exercise of warrants, and conversion of redeemable convertible bonds. Total shares outstanding rose from 3,242,032,092 to 3,353,915,679. Outstanding convertibles and warrants could further dilute shares, but the capital raised has strengthened the company’s balance sheet and liquidity.

Cash Flow and Balance Sheet Highlights

• Net Cash Generated from Operations: \$3.61 million (vs \$1.14 million in 1H2025)
• Cash and Equivalents: \$4.22 million at period end (vs \$587,000 in 1H2025)
• Borrowings: Decreased due to conversion and repayments
• Inventories and Receivables: Increased to support higher sales and future order fulfillment

Directors’ Pay and Remuneration

Directors’ fees for the period amounted to \$75,000, in line with the prior year. Employee benefits and salaries rose to \$2.58 million, reflecting increased personnel costs and key hires required for business expansion.

Exceptional Items & Corporate Actions

• Gain on Liquidation of Subsidiary: \$427,000 recognized as other operating income.
• No Divestments, IPOs, or Major Asset Sales: Other than conversion of securities, no significant asset sales or fundraising activities occurred.
• No Dividend Declared: The company remains focused on growth and improving profitability before resuming dividend payouts.

Order Book and Business Outlook

• Order Book: Over \$18 million as at 30 September 2025, with \$8 million in ADR and \$10 million in SPC segments. Substantial fulfillment is expected within the next 12 months.
• Growth Drivers: ADR and SPC businesses, particularly the IDRS service for LEO satellites and software defined radio modules, are expected to lead future revenue growth.
• Regulatory Update: SGX has removed the financial watch-list regime, and Addvalue is no longer under watchlist.

Chairman’s Statement

“We are encouraged by the sustained growth in revenue achieved in 1H2026 as compared to 1H2025 as well as the achieving improving profit after tax and EBIDTA and we envisage the momentum to continue for the next 12 months. We expect our future growth to be strongly driven by the twin engines: i) ADR-related business and ii) SPC-related business… Barring any unforeseen circumstances, we are confident that the Group will perform better in FY2026 relative to FY2025 in view of the growing trend in the period under review.”

The Chairman’s statement is distinctly positive, highlighting confidence in continued growth and the successful execution of business strategy.

Conclusion and Investment Recommendations

Overall Financial Performance: Addvalue Technologies has delivered a strong performance in 1H2026, marked by substantial improvements in revenue, profits, operational cash flow, and balance sheet strength. The business has successfully transformed its core segments and built a robust pipeline with a sizable order book.

For Current Shareholders: The outlook remains positive, with momentum in ADR and SPC segments and a strong cash position. Hold the stock to benefit from further growth and potential future dividends as profitability stabilizes. Monitor dilution risks from outstanding convertibles and warrants.

For Potential Investors: Consider initiating a position, especially if seeking exposure to high-growth satellite communications and digital connectivity sectors. The company has exited the SGX financial watch-list, signaling increased stability. Entry points may be attractive, but keep an eye on share dilution and execution risks.

Disclaimer: This analysis is based solely on the information provided in the company’s interim financial statements, which are unaudited. Investors should consider their risk tolerance, do further research, and consult with professional advisors before making investment decisions.

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