Latest / Investor Exchange / Camsing Healthcare Limited FY2025 Results

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Camsing Healthcare Limited FY2025 Results · Investor Exchange

• 0:02
  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
• 0:08
  Ever wish you could just look at a company's report and get the real story?
• 0:11
  Past. Without drowning in jargon. Yeah, go right to the chase. Exactly.
• 0:15
  Well, that's our plan today. We've got the full year 2025 results announcement
• 0:20
  for Kamsing Healthcare Limited right here.
• 0:23
  Kamsing full year 2025 results announcement.
• 0:26
  Got it. Our mission, basically, is to figure out how they actually did in the
• 0:30
  year ending January 31st, 2025.
• 0:33
  Okay, so performance, the why behind it, and what they're thinking comes next.
• 0:38
  Precisely. We'll dig into the main financial statements, see what management
• 0:41
  is saying, and try to piece it all together. All right, let's jump in.
• 0:44
  Where should we start? Revenue seems logical.
• 0:46
  Good call. So the top line number. Okay, so for the full year,
• 0:49
  FY 2025, revenue landed at S4.783 million dollars. And how does that stack up
• 0:56
  against the year before?
• 0:57
  It's actually down, but only just barely, like 1%. It was $4.852 million in 2024.
• 1:04
  Huh, okay. So pretty flat overall. Any specific reasons why?
• 1:07
  Well, the report points to lower retail sales.
• 1:10
  So sales to regular customers were down. But wasn't there some good news in there too?
• 1:15
  Yeah, that's the interesting part. There are corporate sales selling to other
• 1:18
  businesses that actually jumped quite a bit. at $686,000 this year compared
• 1:23
  to $389,000 last year. Wow.
• 1:27
  Okay, so a shift towards more business-to-business stuff, maybe?
• 1:30
  Could be. Or at least that part grew nicely, offsetting some of the retail dip for the full year.
• 1:35
  But wait, wasn't the end of the year different? The final quarter? Ah, yes.
• 1:40
  Good point. If you zoom in to just Q4 2025, it's a totally different story.
• 1:44
  Revenue surged. Surged. By how much? A pretty hefty 72% compared to Q4 of 2024.
• 1:51
  So S1.144 million dollars versus a $667,000.
• 1:56
  Okay, 72%. That's significant. What drove that? They're saying higher retail and online sales.
• 2:01
  So individuals buying more again, plus maybe a push online. And something about loyalty points.
• 2:05
  Right. An adjustment for unredeemed loyalty points also boosts that number.
• 2:08
  So, yeah, they finished the year strong on the revenue front,
• 2:11
  even if the full year was flat.
• 2:12
  Okay, so revenue is a bit of a mixed bag down slightly overall.
• 2:15
  But with a strong finish and growth in corporate, how about profit on those
• 2:19
  sales, gross profit? All right, let's look at that.
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  For the full year, gross profit was $2.739 million.
• 2:27
  That's actually down 8% from a $2.982 million in 2024.
• 2:31
  Down 8%. Even with that strong Q4 revenue, how does that work?
• 2:35
  Well, Q4 itself did see a higher gross profit, up 22 percent.
• 2:39
  But for the whole year, it seems the cost of sales went up quite a bit.
• 2:43
  Ah, so the cost of the goods they sold increased.
• 2:45
  Yeah, both in the quarter and for the full year. So even when sales went up,
• 2:48
  like in Q4, the cost to make those sales also climbed, eating to the profit
• 2:53
  margin for the year overall.
• 2:54
  Got it. Makes sense. It's not just sales. It's what's left after costs.
• 2:57
  Now, you mentioned something earlier, or I saw it in the report,
• 3:01
  other income. That looked huge. Oh, yeah.
• 3:03
  That definitely jumps off the page. A massive increase. We're talking 2,252%
• 3:07
  for the full year. 2,000% in Q4.
• 3:10
  Even wilder in Q4. 9,707 2% increase.
• 3:13
  Okay, hold on. What on earth is going on there? That can't be normal operations, surely.
• 3:17
  You're right. It's mostly not. The big drivers here were interest on borrowings
• 3:21
  being waived when their stock trading resumed.
• 3:24
  That's a one-off. Waived interest. Okay. What else? A really significant loan
• 3:28
  waiver from their previous controlling shareholder.
• 3:32
  $557,000 just forgiven. Wow. Okay. So debt forgiveness, that's definitely not
• 3:37
  recurring income. Exactly.
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  Plus in Q4, they also had some government grant income and wrote off some payables,
• 3:43
  money they owe that they no longer have to pay.
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  So a lot of extraordinary items boosting that other income line.
• 3:49
  It's important people realize that, right? It makes the bottom line look better,
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  but it's not from selling more health products necessarily.
• 3:56
  Absolutely crucial distinction. It helped reduce the loss significantly,
• 3:59
  but it doesn't reflect the core business health in the same way revenue or gross profit does.
• 4:05
  Right. So let's look at where they spent money.
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  Operating expenses, marketing and distribution. Those went up.
• 4:11
  For the full year, up 7%. And for the quarter, Q4 up 34%. Why the increase there?
• 4:16
  Higher payroll, mainly.
• 4:17
  Also more spending on marketing services and advertising. Seems like a push to get the word out.
• 4:22
  Maybe trying to drive those retail and online sales we saw pick up in Q4.
• 4:26
  It would very well be. Investing in growth, potentially.
• 4:29
  Now, admin and other operating costs. How did they look? A bit mixed.
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  They actually decreased in Q4 by 20%, but that was mostly because the previous
• 4:37
  Q4 had unusually high professional fees.
• 4:39
  Okay, so comparison effect. And for the full year? For the full year,
• 4:43
  admin costs were up slightly, about 9%. Again, higher payroll was the main factor mentioned.
• 4:48
  And there was something about impairments or lack thereof? Yes.
• 4:52
  That's another important factor. In FY 2024, they had impairment losses on plant
• 4:57
  and equipment and right-of-use assets, basically write-downs on the value of those assets.
• 5:02
  In FY 2025, those losses didn't happen.
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  So the absence of those large negative hits from the previous year helps the
• 5:09
  comparison and makes the current year's results look better.
• 5:12
  Right. Avoiding a big loss is definitely a positive swing factor.
• 5:16
  OK, what about finance costs like interest on their loans? Big improvement there, too.
• 5:20
  Finance costs dropped substantially, down 83 percent in Q4 and 47 percent for
• 5:25
  the full year. And that ties back to the waived interest you mentioned.
• 5:28
  Exactly. Lower outstanding loan amounts help, too. But the waived interest,
• 5:32
  especially related to loans with someone called QRH and other settlements,
• 5:35
  really brought those costs down. Okay, so let's pull this together.
• 5:38
  Revenue slightly down overall, but strong Q4.
• 5:42
  Gross profit down overall despite Q4. Huge boost from other income, mostly one-offs.
• 5:49
  Marketing costs up, admin slightly up. No big impairments this year.
• 5:53
  Finance costs way down. What does that do to the bottom line,
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  the loss? Well, the net result is a much smaller loss before tax,
• 6:01
  a really significant reduction.
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  For the full year, the loss before tax decreased by 68 percent.
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  And for Q4 alone, it was down 81 percent. That's a big improvement.
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  So driven by? A combination. The Q4 revenue helped then. The absence of those
• 6:14
  impairment losses was big. Lower finance costs, definitely.
• 6:18
  And that huge other income figure. But offset somewhat by?
• 6:21
  Offset by the lower overall revenue for the year, the lower growth profit margin,
• 6:25
  and the increases in marketing and admin spending. So, yes, a smaller loss,
• 6:28
  but driven by a mix of operational factors and those significant one-off items.
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  Okay, let's shift to the balance sheet.
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  A statement of financial position. What does the snapshot look like at the end
• 6:39
  of January 2025 compared to the year before?
• 6:43
  Assets, liabilities. Sure. So on the asset side, non-current assets think long-term
• 6:48
  stuff like equipment. They increased.
• 6:51
  They added some plant and equipment and right-of-use assets.
• 6:55
  Okay. And current assets, short-term things. Those increased too,
• 6:58
  mainly because they had more inventory on hand and also more money owed to them
• 7:02
  by customers' receivables. cash was up just a tiny bit.
• 7:06
  More inventory could be good or could mean stuff isn't selling.
• 7:09
  Depends. What about the other side, liabilities, what they owe?
• 7:12
  Big changes here. Current liabilities debts due within a year went down significantly.
• 7:18
  Why was that, paying off debt? Partly. But a big factor was reclassifying some
• 7:22
  borrowings from current to non-current, meaning they have longer to pay them back now.
• 7:26
  Also, decreases in what they owe suppliers, payables, other short-term loans,
• 7:31
  and lease liabilities. So pushing some debt further out, what about non-current
• 7:35
  liabilities then? Those went up. Makes sense, right?
• 7:38
  Because of that reclassification of borrowings, plus the non-current part of lease liabilities.
• 7:43
  So the overall picture, still owe more than they own, net liabilities.
• 7:48
  Yes, still in a net liability position, but it improved quite a bit.
• 7:52
  The gap narrowed, which is a move in the right direction.
• 7:56
  Okay, now cash flow, always important. Did cash actually come in or go out from
• 8:01
  running the business? This is interesting.
• 8:02
  In FY 2024, they actually generated cash from operations.
• 8:07
  Positive operating cash flow. Good. And this year, FY 2025?
• 8:11
  It flipped. They use cash in operating activities net cash used.
• 8:15
  Why did it change? They made a loss, but... Well, the loss itself is a factor,
• 8:19
  but it's also about working capital changes.
• 8:21
  Remember how inventory and receivables went up? Right. That ties up cash.
• 8:25
  So billing inventory and waiting for customers to pay uses cash,
• 8:30
  even if you're making sales.
• 8:31
  That contributed to the negative operating cash flow. Okay.
• 8:34
  And investing. Did they buy stuff? Yes. They used cash in investing activities,
• 8:38
  mainly buying that plant and equipment we mentioned earlier. And financing.
• 8:41
  Loans, shares. That's where cash came in.
• 8:45
  Net cash generated from financing. They got new loans from major shareholders
• 8:49
  and another party, issued new shares, and issued convertible loans.
• 8:53
  Convertible loans. Yeah. Debt that can turn into shares later.
• 8:57
  Of course, they also used some cash to repay existing liabilities.
• 9:00
  But overall, financing activities brought cash in.
• 9:03
  So where did they end up with cash at the end of the year? Cash and cash equivalents
• 9:08
  ended at S-128,000, which is actually slightly up from S-113,000 the year before.
• 9:15
  So pretty stable cash balance despite all the moving parts. Hmm. Okay.
• 9:20
  Now, something that always catches my eye is the auditor's opinion.
• 9:22
  Was there anything notable there?
• 9:24
  Yes, definitely. The auditor's included a section on material uncertainty related to going concern. Whoa.
• 9:31
  Okay, that sounds serious. What does it mean? Practically. It means the auditors
• 9:35
  believe, based on the financials of the history of losses, the net liability
• 9:38
  position, that there's significant doubt about the company's ability to continue
• 9:42
  operating for the foreseeable future,
• 9:44
  typically the next year. A red flag. A major red flag.
• 9:47
  But the accounts were still prepared on a going concern basis. Yeah. How?
• 9:51
  Management argues that it's still appropriate.
• 9:54
  They point to their plans pushing online sales growth, cutting costs where they
• 9:59
  can, and crucially, they state they have commitment from shareholders for more
• 10:05
  capital injections if needed.
• 10:07
  Financial support. So management is saying, yes, there are risks,
• 10:11
  but we have a plan and backup.
• 10:12
  While the auditor is saying, plan or not, these risks are material. It's a good way to put it.
• 10:17
  It highlights a significant risk factor for anyone looking at the company.
• 10:21
  Okay. Let's touch on the capital structure quickly.
• 10:24
  Share capital increased. Yes, because they issued new ordinary shares during the year.
• 10:29
  Those convertible bonds are loans you mentioned. Right. They also issued zero-coupon
• 10:33
  mandatory convertible bonds. that created a new convertible bond reserve on the balance sheet.
• 10:39
  And mandatory convertible means they will become shares eventually.
• 10:42
  Correct, which means the total number of shares could increase quite a bit down
• 10:46
  the line when that conversion happens, diluting existing shareholders potentially.
• 10:50
  Which leads nicely into loss per share. How did that look?
• 10:54
  Well, they report both basic and diluted loss per share.
• 10:59
  Because the number of shares increased, Even though the total loss decreased,
• 11:03
  the loss per share might not have improved quite as dramatically.
• 11:06
  You have to factor in that larger share base. The loss has spread over more shares.
• 11:11
  OK, so that's the look back at the year's performance and financial position.
• 11:15
  What about looking forward? What's management's outlook? They're pretty candid about the challenges.
• 11:20
  They expect the Singapore economy to slow down. They see inflation sticking
• 11:23
  around and potential supply chain issues. So, headwinds.
• 11:28
  Definitely. They think all this could dampen consumer spending.
• 11:31
  Which isn't ideal for a company selling health foods and supplements.
• 11:35
  So what's their plan to deal with that? Their strategy seems to be multi-pronged.
• 11:40
  First, develop new products, keep things fresh. Makes sense.
• 11:43
  Second, really push on expanding sales channels.
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  They specifically mention, again, online sales and more B2B collaborations,
• 11:50
  those corporate sales that grew well this year.
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  Doubling down on what worked, perhaps, and online.
• 11:55
  Seems like it. And third, just being careful with money.
• 11:59
  Prudent cost management, as they put it. Watching the pennies,
• 12:02
  are they rethinking their physical stores at all?
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  They mention monitoring retail outlet performance, which suggests they're keeping
• 12:09
  an eye on whether those stores are pulling their weight.
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  And they explicitly state the strategic importance of growing that online presence.
• 12:16
  So it sounds like a shift towards digital and partnerships while managing costs
• 12:21
  and keeping an eye on physical retail. That sums it up well.
• 12:24
  Overall, despite the tough environment and the going concern note,
• 12:28
  they express cautious optimism for improvement, barring any major unforeseen problems.
• 12:34
  OK, so let's try and wrap this up. Key takeaways from this deep dive into Kamsing Healthcare.
• 12:38
  Well, they significantly cut their losses in FY 2025. That's clear.
• 12:42
  A chunk of that improvement came from those big one-off income items like the
• 12:46
  waived interest and loan forgiveness. Exactly. That's a critical caveat.
• 12:50
  Operationally, revenue was flat, growth profit margins squeezed a bit,
• 12:54
  though corporate sales grew and Q4 finished strong.
• 12:57
  And they're spending more on marketing, perhaps, to drive that online and B2B
• 13:01
  growth they're focusing on. Right. Their strategy seems clear.
• 13:05
  New products, digital expansion, B2B, and cost control.
• 13:09
  But they face economic headwinds. And that material uncertainty about going
• 13:13
  concern still looms. So it leaves you wondering, doesn't it?
• 13:17
  For you listening, maybe think about this.
• 13:19
  With their big bet on online sales and B2B, what are the real make or break factors there?
• 13:25
  What are the biggest risks and potential rewards?
• 13:27
  Yeah. And how does a potentially slowing economy specifically affect demand for health products?
• 13:33
  Do people cut back or do they see it as essential? That could be key for Kamsing.
• 13:37
  If you want to explore more, definitely check out the full announcement,
• 13:41
  track their online efforts if you can, and keep an eye on Singapore's economic news.
• 13:45
  Absolutely, it really comes down to that balance, doesn't it?
• 13:47
  Management's optimism versus those auditor warnings, it's a complex picture.
• 13:51
  Indeed, how well they execute that strategy in this environment.
• 13:55
  Music.