MBV International Limited Annual Report 2025: Key Insights and Shareholder Alerts

Financial Performance and Results

MBV International Limited reported a decline in financial performance for the year ended 31 December 2025. Revenue dropped to RM193.08 million, a decrease of 3.9% from the previous year, while gross profit slipped by 1.2% to RM61.85 million. The gross profit margin improved slightly to 32.0% from 31.2%, but the company recorded a loss attributable to owners of the Company of RM707,000 compared to a profit of RM22.41 million in 2024. Basic (losses) earnings per share were RM(0.11) cents, marking a significant reversal from the previous year’s RM3.57 cents.

Key Factors Impacting Performance

• Challenging Macroeconomic Environment: Cautious consumer sentiment and moderated demand for imprintable apparel products contributed to the revenue decline.
• Increased Expenses: Selling and distribution costs rose by RM0.8 million (8.2%), reaching RM10.5 million due to continued investments in marketing and promotional activities. Administrative and other operating expenses also increased by RM0.7 million (2.8%), mainly from higher directors’ remuneration and staff-related expenses.
• No Dividend Declared: The Board did not recommend any dividend for the year, maintaining the stance from 2024.

Strategic Developments and Use of IPO Proceeds

MBV International Limited had previously allocated unutilised IPO proceeds for expansion and acquisition, notably funding the acquisition of 20,000 shares in Lordan Group Ltd. As of year-end, unutilised proceeds of HK\$33 million were deposited in banks. The Board announced a further reallocation of these funds to strengthen sales, marketing, and e-commerce capabilities, aiming to expand the product portfolio and reach new customers, especially those outside the Group’s current geographic coverage.

Post Balance Sheet Event: Sale of Lordan Group Stake

A critical price-sensitive event occurred after the reporting period: On 16 February 2026, China MBV Holdings Limited, a wholly-owned subsidiary, entered into a share purchase agreement to sell its 40% stake in Lordan Group Ltd for HK\$31.41 million (RM16.08 million). The Board cited prolonged time required for Lordan to achieve sustainable profitability and limited business synergies as reasons for the disposal. The completion of this transaction is subject to various approvals and is expected by 16 June 2026.

This disposal is noteworthy for shareholders, as it signals a strategic shift and a potential reallocation of resources that may impact the Group’s future earnings and investment profile.

Risk Factors and Management

• Economic Climate: The Group’s performance is closely tied to consumer confidence and economic conditions in its markets.
• Credit, Liquidity, and Currency Risks: The Group actively manages credit risk, liquidity risk, and currency risk with established policies, but the exposure remains significant given the macroeconomic uncertainties.
• Interest Rate Risk: With floating-rate borrowings of RM4.21 million, a 1% change in interest rates could affect pre-tax profits by RM42,000.

Corporate Governance and ESG Initiatives

The Board reaffirmed its commitment to robust corporate governance, compliance, and internal controls. The Group has adopted stringent policies for risk management, inside information disclosure, whistle-blowing, and anti-corruption training. The ESG Report for 2025 was published, reflecting the Group’s ongoing focus on sustainability and regulatory compliance. No material legal or regulatory breaches were reported during the year.

Share Capital, Options, and Ownership Structure

• Share Capital: 628,000,000 shares issued and fully paid.
• Share Option Scheme: Up to 62,800,000 shares (10% of shares in issue) available under the Share Option Scheme, with no grants, exercises, lapses, or cancellations during the year.
• Controlling Shareholders: Dato’ Tan Meng Seng, Dato’ Tan Mein Kwang, and Mr. Tan Beng Sen, acting in concert, maintain 66.05% ownership via MBV Capital Limited.

Audit Opinion

The external auditor, Forvis Mazars CPA Limited, issued an unqualified opinion on the consolidated financial statements. The audit highlighted key matters such as the impairment assessment of investment in associates, but found no material misstatements or inconsistencies.

Investor Relations and Shareholder Communication

MBV International Limited maintains active communication channels with shareholders, including annual and interim reports, AGMs, and disclosures on its website. The Board encourages shareholder engagement and regularly reviews the effectiveness of its communication policies.

Summary and Potential Share Price Impacts

• Loss for the year and absence of dividend could negatively affect shareholder sentiment.
• Strategic disposal of Lordan Group Ltd stake is a significant event, potentially improving cash flow and allowing capital reallocation, but also highlights challenges in achieving profitability from acquired businesses.
• Continued investment in marketing and e-commerce positions the Group for potential recovery, but macroeconomic uncertainties persist.
• Strong governance and risk management practices support long-term stability.

Disclaimer

This article is based on the MBV International Limited 2025 Annual Report and is intended for informational purposes only. It does not constitute investment advice. Investors should conduct their own research and consult with financial advisors prior to making any investment decisions. The information provided herein is subject to change and may not reflect the most recent company developments or market conditions.

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