Serial Achieva Limited: FY2025 Full-Year Financial Review and Investor Analysis

Serial Achieva Limited, listed on the Catalist Board of the SGX, released its unaudited condensed interim financial statements for the full year ended 31 December 2025. The Group operates primarily in the distribution and marketing of information technology products, co-location services, and related infrastructure solutions across Malaysia, Thailand, and, previously, Singapore.

Key Financial Metrics and Performance

Historical Performance Trends

• Revenue: Full-year revenue increased 22% to US\$96.8 million, driven by the commencement of Thai operations and robust Malaysian consumer demand for IT hardware.
• Gross Profit: Gross profit margin improved from 2.1% to 3.0% despite industry headwinds, reflecting better product mix and margin management.
• Net Loss: Net loss narrowed sharply to US\$0.7 million (from US\$6.1 million), primarily due to the absence of exceptional losses (reverse acquisition and introducer fees) that impacted FY2024, as well as improved operational performance in Malaysia and Thailand.
• Quarter-over-Quarter: 2H2025 revenue fell 21% YoY owing to the cessation of the Singapore subsidiary but margins improved and the net loss was significantly reduced.
• No Dividend: No dividend was declared for FY2025 or the prior year, as the Group remains in a loss-making position.

Exceptional Items and Non-Recurring Events

• FY2024 results were severely affected by a one-off accounting loss from a reverse takeover (US\$4.2 million) and an introducer fee paid in shares (US\$0.4 million). These did not recur in FY2025.
• The Singapore subsidiary, Achieva Tech Allianz Pte. Ltd., ceased operations and was struck off in December 2025. Its closure resulted in a one-off return of share capital (US\$81,000 to Serial Achieva and US\$66,000 to a non-controlling shareholder).
• Finance lease receivables of US\$18.2 million were recognized following a three-year sub-lease of co-location space in Malaysia, strengthening the Group’s recurring income base.
• In August 2025, the Group entered a joint venture in Vietnam, targeting further ASEAN expansion.

Cash Flows, Asset & Liability Dynamics

• Operating Cash Flow: Turned positive at US\$8.7 million versus outflow of US\$2.0 million in FY2024, aided by improvements in working capital management, notably decreases in receivables and inventories.
• Borrowings: Total borrowings rose to US\$25.1 million (from US\$6.0 million), mainly due to lease liabilities from the new finance lease and increased bank borrowings to support growth. Notably, the Group breached certain loan covenants at year-end but has since made repayments and is working with lenders; banks have not demanded immediate repayment.
• Net Gearing: Was negative 15% at year-end due to recognition of finance lease liabilities that are offset by corresponding receivables.
• Cash and Cash Equivalents: Increased to US\$7.5 million from US\$5.0 million a year ago.

Related Party Transactions and Share Capital Actions

• Significant purchases and management fees were transacted with related parties (Serial System Ltd and its subsidiaries), reflecting the Group’s integration with its holding company’s supply chain.
• No share buybacks, placements, or dilution occurred in FY2025. The number of issued shares was unchanged at 169,774,355.
• No directors’ remuneration breakdown was disclosed in the report.

Forecasts and Industry Outlook

The Group anticipates a challenging 2026 due to cautious consumer sentiment and potential pricing pressures from memory shortages. Strategic focus areas include innovation (gaming, cloud storage, AI solutions), regional expansion, operational efficiency, and risk management (currency, supply chain, credit). The Group aims to broaden its customer base and diversify revenue sources while remaining vigilant to macroeconomic volatility.

Dividend Policy

• No dividend was declared or recommended for FY2025 or the prior year, reflecting the ongoing net loss and accumulated losses position.

Chairman’s Statement

“The Group anticipates that operating conditions in 2026 will remain challenging, shaped by cautious consumer sentiment and potential pricing pressures from memory shortages. To stay resilient, the Group will continue to invest on innovation by expanding into high-growth segments like gaming, cloud storage and AI solutions. At the same time, the Group will actively pursue geographic diversification in Southeast Asia and explore growth opportunities through strategic partnerships and acquisitions to reduce market concentration risks and build long-term resilience.

Guided by our 2026 theme of strengthening capabilities and creating opportunities, we will broaden our customer base, diversify revenue sources and cultivate innovation. In parallel, we will strengthen internal capabilities, boosting operational efficiency and talent development. We will remain vigilant in monitoring external risks, such as currency volatility, supply chain disruptions, and trade restrictions, ensuring we manage these risks with disciplined inventory and credit practices.”

Tone: The statement is cautiously optimistic, recognizing industry headwinds but emphasizing resilience, innovation, and prudent risk management.

Conclusion and Investment Recommendation

Summary: Serial Achieva Limited delivered a substantial improvement in FY2025, narrowing its net loss and growing revenue and gross profit despite industry challenges and the cessation of its Singapore subsidiary. The Group’s expansion in Thailand and prudent inventory and credit management were key contributors. However, the business remains loss-making, payouts are absent, and gearing has increased, with some loan covenant breaches (albeit addressed post-year-end).

• If you are currently holding the stock: Maintain a hold stance. The company has stabilized operationally and is pursuing sensible growth in high-potential areas, but the absence of profitability and dividends, alongside increased leverage and ongoing industry risks, argue against a buy. Monitor the Group’s progress in breaking even, reducing gearing, and succeeding in new markets like Vietnam.
• If you are not holding the stock: Remain on the sidelines until sustained profitability is demonstrated. While the turnaround and strategic direction are encouraging, investors should await evidence of consistent net profit and/or dividend resumption before considering an entry.

Disclaimer: This analysis is based solely on the information disclosed in Serial Achieva Limited’s FY2025 report. It does not constitute investment advice. Investors should conduct their own due diligence and consider their financial position and risk appetite before making any investment decisions.

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