SDAI Limited Financial Analysis: Net Profit Decline of 60.9%

Business Description

SDAI Limited, incorporated in Singapore, is primarily involved in the selling and distribution of imported high-end kitchen systems and appliances, wardrobe systems, and household furniture and accessories. The Group operates in Hong Kong, focusing on residential projects and the distribution and retail segments.

Industry Position

SDAI Limited operates in the high-end household appliances and furniture industry. The company faces competition from other importers and distributors of luxury kitchen systems in Hong Kong, with no specific market share detailed. The industry is competitive, with pressure from both local distributors and international brands.

Revenue Streams

The company derives revenue from its residential projects and distribution and retail segments, with a significant decline in both areas. The customer base primarily includes high-end residential consumers in Hong Kong.

Financial Statement Analysis

Income Statement

• Revenue decreased by 29.3% to S\$175,205 in Q2 2024 compared to Q2 2023.
• Net loss for the period was S\$1,007,627, an increase of 60.9% compared to the previous year.
• Gross profit increased by 11.5% due to higher margins in the distribution and retail segment.

Balance Sheet

• Current assets increased to S\$1,485,304 as of 30 June 2024, primarily due to higher cash and receivables.
• Total equity is negative at S\$6.95 million, indicating a weak financial position.

Cash Flow Statement

• Net cash used in operating activities was S\$1,753,719 for Q2 2024.
• The company secured a loan from a director, which contributed to financing activities.

Dividend and Earnings

No dividends have been declared due to the company’s loss-making status. The company reported a net loss, and earnings have declined.

Key Findings

• Strengths: Increased gross profit margin in the distribution and retail segment.
• Risks: Significant net loss and negative equity position. The company is in a challenging financial situation with no dividends declared.

Report Date and Financial Year

The report covers the financial period ending 30 June 2024.

Special Activities

The company is undergoing a corporate turnaround plan and restructuring, including securing new loans and exploring new business opportunities.

Investment Recommendations

If Holding the Stock

Given the company’s current financial challenges and negative equity, investors should consider holding off on additional investments until the company’s financial health improves.

If Not Holding the Stock

Potential investors should be cautious and may want to wait for a clearer turnaround strategy and improved financial results before investing.

Disclaimer

This analysis is for informational purposes only and should not be considered financial advice. Please consult with a financial advisor before making any investment decisions.

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