Latest / Investor Exchange / Sen Yue Holdings FY2025 S$12M Loss ERASED! See The Shocking New Profit

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Sen Yue Holdings FY2025 S$12M Loss ERASED! See The Shocking New Profit · Investor Exchange

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  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
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  Welcome back to the Deep Dive. We've got the full year financial results for
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  SendU Holdings Limited, their FY 2025 report.
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  And it tells a pretty remarkable story. It really does. When you look at these
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  numbers, it's not just an improvement, it's a complete transformation.
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  Absolutely. So this Deep Dive is for you. We're going to break down the key
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  financials, figure out what was really driving this performance and then look
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  ahead at what the company is facing over the next, well, very volatile 12 months.
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  And just to set the stage, all the numbers we're talking about today are in
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  Singapore dollars. Right.
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  The shift is just massive. I mean, you're looking at a company that wasn't just
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  struggling. It had a huge net loss of $12.14 million last year in FY 2024.
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  A huge loss. And in FY 2025, they didn't just, you know, shrink that loss.
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  They completely flipped the switch and posted a net profit of $7.18 million.
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  That swing is the whole story right there. It is. But the mechanism behind it
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  is volume. The group more than doubled its annual revenue.
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  We're talking a jump from S33.59 million dollars all the way up to 69.57 million dollars.
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  And it wasn't like spread out evenly.
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  It was an explosion in one specific segment. OK, let's unpack that.
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  Doubling your top line in a single year is one thing, but climbing out of a
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  hole that deep to actually make a profit.
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  That's the real headline. So let's break down the numbers FY 2025 versus FY
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  2024. He said group revenue rose by S $35.98 million.
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  That's a 107% increase. Yeah, 107%. It suggests they tapped into some kind of
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  new demand that just wasn't there or maybe wasn't accessible the year before.
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  Exactly. And while that $34 million profit might sound small on its own.
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  No, its significance is huge.
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  When you go from a loss that was, what, about 36% of your revenue to any kind
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  of profit, it completely changes the narrative for the company. It opens up financing.
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  It shifts the focus from just surviving to actually expanding.
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  And the efficiency gains that propped that up are pretty stunning, too.
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  Gross profit went from about S1 million dollars to 6.39 million dollars.
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  Yeah, right. But the margin is the key.
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  Yes, the gross profit margin. It more than tripled, jumping from a razor thin 3.0 percent in FY 2024 to
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  to a much healthier 9.2% in FY2025.
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  And that margin improvement is, for me, the most critical operational detail here.
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  If you're running at a 3% gross margin, you are one bad month away from disaster. Always.
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  Moving to over 9% tells you they either found huge cost savings or,
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  and this is more likely, they shifted their business mix towards much higher value activities.
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  For a company moving commodities, 9% is, ah, it's pretty solid.
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  And you can see that stability on the balance sheet, too. their positive working
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  capital, basically the cash they have for short-term bills, it went up from
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  $7.13 million to S8.63 million. Yeah. A good sign.
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  Yeah, healthier day-to-day operations. Okay, so this gets to the why.
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  The numbers are great, but the group has three segments, right?
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  Metal components, ED coding, and resources recovery.
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  Yeah. So where on earth did that S36 million dollars in new revenue come from?
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  Well, it wasn't spread around at all.
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  The resources recovery segment was the absolute powerhouse here.
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  It was the only engine driving this whole turnaround. Really?
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  The only one? Its revenue grew by est $35.61 million in just one year.
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  That's 188% growth, hitting $54.57 million.
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  Wow. And get this, that one segment's growth accounts for pretty much the entire
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  group's revenue increase. The other segments were either flat or...
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  Declining. That is an incredible concentration. So it begs the question.
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  What exactly is resources recovery and why did it suddenly boom like that?
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  So resources recovery is basically recycling materials from spent batteries.
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  The key product they're dealing with is something called black mass. Black mass. Yeah.
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  You can think of it as this complex powder you get when you shred old lithium ion batteries.
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  It's valuable because it's full of critical metals, nickel, cobalt, lithium.
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  Okay, that makes sense. And the report is really clear about why it surged.
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  It was a perfect storm, really.
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  First, there was just much stronger market demand for black mass.
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  That let them process higher volumes. But second, and this is crucial,
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  they finally overcame the supply problems that killed them the year before.
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  So the feedstock supply chain opened up. Exactly. The supply of old batteries
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  to process eased up just as the demand for the final product went through the roof.
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  So their biggest weakness in FY 2024, not being able to get enough raw material,
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  became their greatest strength in FY 2025.
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  But that creates a huge risk, doesn't it? Relying almost entirely on this one
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  thing. That's the billion-dollar question for their strategy rate.
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  While this boom saved the year, you have to look at the headwinds elsewhere.
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  The ED coding segment, for example, it showed steady growth,
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  up about 10% to $13.05 million.
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  That's fine. Stable. But the old legacy business, metal components,
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  its revenue dropped by 47%, a $1.35 million decline.
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  The report says it's just weak customer demand. So without that recycling boom,
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  we'd be talking about another massive loss. Totally.
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  It confirms this structural shift. They're a recycling and commodity trading
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  company now, not a traditional manufacturer.
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  But, you know, revenue alone doesn't make you profitable. How did they handle
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  their costs during this surge?
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  Right. Revenue gets you to the party, but cost control is what lets you stay.
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  What do they do on the efficiency side? They showed a lot of discipline.
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  First, on input costs, the allowance they set aside for inventories dropped
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  by 68%. Okay, what does that mean in simple terms?
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  It means there was less price volatility for black mass and battery scrap.
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  When prices are stable, you don't have to write down the value of what you're holding, but...
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  That goes straight to the bottom line. It's a huge help. And what about their debt?
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  They were aggressive. Finance expenses were down 36% for the year.
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  That's because they've just been consistently paying down their borrowings.
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  They cut their current loans by S2 million dollars, which is a 43% decrease.
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  So they're shoring up the foundations. Exactly.
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  In a business this sensitive to commodity prices, cutting your debt is so critical.
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  Lower debt means lower fixed interest payments, which gives you breathing room
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  when metal prices inevitably swing back down.
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  That's smart. Now, there's a tricky item here.
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  Taxes. The group had S1.34 million dollars in tax expenses on a tiny C.18 million dollar profit.
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  It looks off. It does, but you need the context.
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  In the prior year, their tax expense was a whopping 7.23 million dollars.
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  That huge number from FY 2024 included some big one-off items from previous years.
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  So if you strip out those old adjustments, the FY 2025 tax bill actually makes
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  a lot more sense with their current operating profit. Okay, got it.
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  We also saw a big improvement in their other gains and losses.
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  The group's other losses shrank by 95% down to just $62,000.
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  And that was mainly a big swing in foreign exchange. They had a forex gain of
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  $0.15 million this year compared to a $1.14 million loss last year.
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  A million dollar swing from currency fluctuations alone.
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  Hmm. That swing basically covered their entire reported profit.
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  But it wasn't all good news. They did have an increase in impairment losses
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  on their property, plant, and equipment.
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  Their PPE, which went up by 0.18 million dollars.
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  So an impairment means they're writing down the value of their old assets,
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  probably in that struggling metal component segment.
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  They're admitting that machinery isn't worth what it used to be.
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  Precisely. They're winning big on recycling and forex, but still cleaning up
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  the mess from the declining manufacturing business. Let's pivot to the future then.
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  This heavy reliance on black mass ties their whole future to the EV market and
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  global commodity prices.
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  So what's the outlook for resources recovery over the next 12 months? Can they keep this up?
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  The immediate outlook seems, well, pretty favorable. You're just seeing a rising
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  tide of end-of-life lithium-ion batteries coming from the U.S. and Europe.
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  That's their feedstock. And the EV market is still growing. Right.
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  The report notes U.S. new EV sales hit a 14% market share in September 2025.
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  That growth feeds the recycling pipeline for years. But, and it's big but, there's the risk.
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  Profitability is extremely sensitive to the prices of nickel, cobalt, and lithium.
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  The company itself warns that even with demand growing, there are still oversupply
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  risks, especially for nickel.
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  If their margins get squeezed, that 9% could disappear fast.
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  And their strategy seems to be all about mitigating that. They're expanding
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  capacity, trying to get more efficient, strengthening collection networks.
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  They're trying to control the supply side to protect that margin.
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  That's the only move they have, really. Now, what about the ED coding segment?
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  That one faces more regional problems, right? It's tied to the Malaysian auto market.
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  Yes, and that market is starting to cool off. New vehicle
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  sales in Malaysia dropped 20% month-on-month in
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  September 2025 The report blames public
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  holidays and consumer uncertainty That's a clear risk to their sales volumes
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  So they have a demand problem there A demand problem and a cost problem ED coding
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  is labor-intensive And with labor and energy costs rising Their margins are
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  getting squeezed from both sides It's tough So what's their plan there?
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  Purely defensive. They're talking about strategic pricing, tight cost control,
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  but also diversifying their services, adding acrylic coating,
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  hot dip galvanizing, basically trying to find new industrial customers outside
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  of the auto sector to fill the gap.
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  Okay. And just to wrap up the financial health check, they're still investing, but cautiously.
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  CapEx commitment is up slightly to S320,000 dollars, but their cash balance
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  actually dropped a bit by about 7.7 million dollars.
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  Yeah, that's because they use a lot of cash to pay down that debt.
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  So aggressively, it's a trade-off. So what does this all mean for you?
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  The core finding is crystal clear.
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  Senu Holdings pulled off a major turnaround to profitability in FY 2025.
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  But that victory was almost entirely thanks to explosive growth in one area, resources recovery.
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  The bet on recycling black masks didn't just pay off, it was essential.
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  It saved them. That's the reality.
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  But here's the final thought, and this comes straight from the report.
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  Despite getting back to profit, the group recommended no dividend for FY 2025.
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  The board said they need to conserve funds for business activities.
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  So the question you have to ask yourself is this. Given how much they depend
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  on this volatile recycling market, how much of that profit and all their operating
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  cash do they need to plow right back into the business?
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  How much do they need to spend to secure those collection networks and improve
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  their technology just to protect that margin from the next big commodity price swing?
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  Because their long-term survival now depends entirely on staying ahead of that volatility.
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  And that costs cash today. It's the difference between a one-time win and a
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  truly sustainable business.
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  A fascinating look at how a global trend like the EV transition can completely remake a company.