Rich Capital Holdings Limited: A Financial Analysis

Net Profit Decline of 4%

Business Description

Rich Capital Holdings Limited is a Singapore-based investment holding company, primarily engaged in real estate investment and development, as well as other short-term accommodation activities and building construction. The company’s principal operations are within Singapore.

Industry Position

Rich Capital Holdings operates within the real estate and construction industry. The report does not provide specific details on competitors or market share, making it challenging to assess its exact position within the industry.

Revenue Streams

The company’s revenue is primarily derived from three streams:

• Construction work: S\$329,000
• Consulting services: S\$69,000
• Subcontracting services: S\$490,000

Revenue for the half year ended 30 September 2024 was S\$888,000, a significant decrease from S\$2,827,000 for the same period in 2023.

Financial Statement Analysis

Income Statement

Important points from the income statement include:

• Revenue decreased by 69% from S\$2,827,000 in 2023 to S\$888,000 in 2024.
• Gross profit decreased by 57% from S\$182,000 to S\$79,000.
• Net loss increased by 4% from S\$479,000 to S\$499,000.
• Loss per ordinary share remained constant at (0.007) cents.

Balance Sheet

Key points from the balance sheet include:

• Total assets decreased from S\$6,805,000 as of 31 March 2024 to S\$6,149,000 as of 30 September 2024.
• Total liabilities decreased slightly from S\$2,765,000 to S\$2,608,000.
• Total equity attributable to owners of the company decreased from S\$2,961,000 to S\$2,463,000.

Cash Flow Statement

Significant items from the cash flow statement include:

• Net cash used in operating activities was S\$1,133,000.
• No cash flows from investing activities.
• Net cash used in financing activities was S\$27,000.
• Cash and cash equivalents decreased by S\$1,160,000, from S\$3,648,000 to S\$2,488,000.

Dividend Information

No dividend has been declared for the half year ended 30 September 2024, in view of the funding needs for future business development and expansion.

Key Findings

Strengths

• Improved gross profit margin from 6.4% to 8.9% due to a change in revenue mix.
• Lower general and administrative expenses by 12% due to reduced legal and professional fees.

Risks

• Significant decrease in revenue by 69% year-on-year.
• Continued net losses, with a slight increase in net loss compared to the previous period.
• No dividend declared, indicating a focus on retaining funds for business development.

Special Activities

The company has deregistered two subsidiaries involved in mining and exploration, focusing on its core business of real estate and construction.

Recommendations

For Current Investors

Given the company’s continued losses and significant revenue decline, current investors should closely monitor upcoming financial results and industry conditions. Consider holding the stock if there is confidence in the company’s strategic direction and potential recovery.

For Potential Investors

Potential investors should approach with caution due to the current financial performance and uncertainties. It may be prudent to wait for signs of financial improvement and stabilization before considering an investment.

Disclaimer

This analysis is based on the financial report for Rich Capital Holdings Limited for the half year ended 30 September 2024. It is not a financial advice. Investors should conduct their own research or consult with a financial advisor before making any investment decisions.