Broker: KGI Securities (Singapore) Pte. Ltd.
Date of Report: April 6, 2026
Excerpt from KGI Securities report.
Report Summary
- Stock: Infinity Development Holdings Co Ltd (IDH SP/ZBA.SI)
- Action: OUTPERFORM (Initiation)
- Target Price: S\$0.62
- Current Price (as of 2 Apr 2026): S\$0.40
- Upside (including dividends): 63.1%
- Key Idea: Infinity supplies adhesives, primers, and hardeners crucial to footwear production, benefiting from high customer stickiness due to a dual-approval process and long qualification cycles. The company is structurally defensive, with a strong net cash balance (~35% of total assets), and is expanding capacity in Indonesia. It is well positioned to benefit from the migration of footwear manufacturing to Southeast Asia.
- Highlights:
- 88% of revenue comes from the ASEAN region, with Vietnam as the largest market.
- FY25 revenue: HK\$835mn; Net profit: HK\$122mn; Stable across cycles.
- The company faces temporary margin pressure in FY26 due to higher petrochemical and freight costs but is expected to remain resilient.
- DCF-based valuation uses an 8.03% WACC and 1.5% terminal growth rate.
- Key risks: OEM production cyclicality, customer concentration, volatile raw material costs, regulatory changes, FX/macro risks, and execution risk in Indonesia expansion.
- Actionable Insight: Investors seeking exposure to the structural migration of footwear production to Southeast Asia and a specialty chemicals supplier with high recurring demand and strong financials should consider Infinity Development Holdings, as KGI initiates with an OUTPERFORM rating and S\$0.62 target price.
above is an excerpt from a report by KGI Securities. Clients of KGI Securities can be the first to access the full report from the KGI Securities website : https://www.kgi.com.sg
