On 19 November 2026 that network lists on the Main Market of Bursa Malaysia at a maximum retail price of RM1.08 a share, valuing the group at about RM8.0 billion (roughly S$2.5 billion). The headline multiple is 41.5 times FY2026 earnings, which makes it look like one of the most expensive retailers on the exchange. The number is accurate, but read the filing closely and it is incomplete in both directions. The price of the earnings is lower than it looks, because the IPO repays the debt that depressed them. The durability of the earnings is less certain than it looks, because much of FY2026’s step-up in margin came in a single year from better supplier terms, and Caring’s own listed history shows how quickly competition can hand gains like that to customers.

Retail applications closed on 5 November. The final price will be fixed by the institutional bookbuild on 10 November, ahead of the 19 November listing. This article works through both sides of that gap and puts numbers on where the shares could sit if the business delivers.

From Brightcare to Big Caring

The group started in 2006 as a single outlet in Damansara Uptown, Petaling Jaya, opened under the name Brightcare Pharmacy by two pharmacists who had both trained at Hospital Selayang: Lee Meng Chuan, now group managing director and CEO, and Lim Sin Yin, now executive director. The holding company was set up in 2013 and renamed Big Pharmacy Holdings that November, and BIG Pharmacy became the group's main brand. For more than a decade it grew slowly, reaching 12 outlets in the Klang Valley by 2017.

Then the strategy changed from opening shops to buying chains. RedCap Pharmacy in Johor came in 2018, along with the private equity firm Creador as a major shareholder. MY Pharmacy followed in 2020, Mercury Wellness on the East Coast and Ting Pharmacy in East Malaysia in 2022 and 2023.

The defining deal closed on 29 December 2023: the purchase of Caring Pharmacy Group for RM889 million. Three-quarters of Caring came from 7-Eleven Malaysia, and the remaining quarter from Motivasi Optima, the holding company of Caring's founding pharmacists, one of whom, Chong Yeow Siang, is now Big Caring's chief operating officer. The deal added 256 outlets and roughly doubled the network overnight. Five days later, on 3 January 2024, Big Pharmacy Holdings was renamed Big Caring Group, and it became Big Caring Group Bhd in March 2026 ahead of the listing.

Caring is worth pausing on. It was itself listed on Bursa from 2013, taken private in 2020 by 7-Eleven Malaysia's mandatory offer, and sold three and a half years later to BIG Pharmacy. The asset now returns to the public market inside a larger wrapper, on its third owner in six years.

Caring’s listed record is the most useful evidence in this whole deal. It floated in 2013 at RM1.25 a share, 13.2 times its pro forma earnings of 9.44 sen [1]. By FY2016, earnings per share had fallen to 3.35 sen: same-store sales growth slowed to 2.2%, and management cut prices on nearly 800 popular products in a “Big Cut” campaign to defend market share, warning that it might give up some margin in the short term [2]. Gross margin fell from 25.8% in FY2013 to 20.0%.

By FY2019 the network had grown from 85 outlets to 125, yet earnings per share were back only to 9.52 sen [3]; price competition had passed much of the benefit of scale to customers. Shareholders still roughly doubled their money on the share price when 7-Eleven paid RM2.60 a share in 2020, but that was about 27 times earnings for shares that had floated at 13 times: the gain came from the multiple, not from earnings. Buyers of Big Caring at about 33 times normalised earnings cannot count on that kind of tailwind.

BIG Pharmacy bought it after the pandemic boost had faded. When 7-Eleven first put Caring up for sale in 2022, Carlyle reportedly offered RM1.3 billion while 7-Eleven sought RM1.5 billion to RM1.8 billion [4]. BIG was reportedly only the third-highest bidder and won after the talks with Carlyle and CVC fell through [5], paying about two-thirds of Carlyle's reported offer. On 7-Eleven's own figures, the agreed price was 20.7 times Caring's earnings [6]. Paying less than an earlier bidder offered is not, by itself, proof of a bargain.

In its last calendar year under 7-Eleven, 2023, Caring earned RM30.6 million after tax on revenue of RM1.38 billion, a 2.2% margin. The FY2026 accounts show the Caring sub-group earning RM120.2 million on RM1.97 billion of revenue, but that is not a clean read on Caring’s shops.

Since the merger, the whole group's procurement, BIG's included, has been centralised in the Caring subsidiary (Caring Pharmacy Group Sdn Bhd), which already bought centrally for its own shops, so the sub-group's figures carry purchasing terms earned on BIG's volumes as well, and its revenue is about RM210 million more than the Caring-branded outlets sold. The prospectus does not let an outside reader separate better shops from group profit booked in a different place. That question runs straight into the supplier section below.

Two upstream acquisitions followed in 2025: Medispec, a pharmaceutical importer and distributor (89.3% for RM249 million), and Your Physio, a physiotherapy chain. A Singapore deal for Yeap Medical Supplies and its seven Pharmex outlets was signed on 14 October 2026, the group's first step outside Malaysia.

The outlet count tells the story: 179 at the start of FY2023, 646 by 30 June 2026, and 668 as at 30 September 2026. Since July 2022, 290 outlets were bought, 235 were opened and 36 were closed. The result is the country's largest chain: 660 of Malaysia's 4,002 licensed pharmacies, against 312 at the next largest, Alpro, and, on the report's measure, about 24.2% of retail pharmacy revenue in 2025, according to the Frost & Sullivan report in the prospectus [7]. Acquisitions supplied 55.2% of the 525 gross additions, before closures. That is a share of outlet additions, not a measure of acquired revenue growth.

The annual breakdown shows how the source of growth has changed. The network jumped from 267 to 538 outlets in FY2024, when the Caring acquisition added 256 outlets. In FY2025 and FY2026 combined, the group opened 115 outlets, acquired just one and closed eight. More recent network growth has relied much more heavily on organic openings.

What the offer actually contains

The IPO comprises up to 1,882 million shares, 25.5% of the enlarged share base of 7,382 million shares. Of these, 591 million are new shares raising RM637.8 million for the company, and 1,292 million are existing shares sold by shareholders for RM1,395 million. At RM1.08, total proceeds are about RM2.03 billion. A further 225 million shares may be sold by Creador’s vehicle under an over-allotment option.

The price has come a long way down. In November 2025, Bloomberg reported that the company was weighing a valuation of up to RM20 billion and a raise of up to RM6 billion [8]. By October 2026 the Wall Street Journal, as reported by The Edge, put the expected valuation at over RM6 billion [9]. RM8.0 billion at the top of the final range is 60% below the first figure. No reason for the change has been given, and a price below the one first mooted says nothing on its own about value at RM8.0 billion.

Nineteen cornerstone investors, including International Finance Corporation and JPMorgan Asset Management, have committed to 665.5 million shares, 9.0% of the enlarged company [10]. A further 922.7 million shares (12.5%) are reserved for Bumiputera institutions approved by the Ministry of Investment, Trade and Industry. The Malaysian public ballot is 147.6 million shares, 2.0% of the company.

The new money is spent as follows:

• RM570.7 million (89.5%) repays bank borrowings within three months of listing,

• RM30.0 million (4.7% of the company’s proceeds) part-funds land for a new distribution centre, and

• RM37.1 million pays listing expenses.

The dividend policy targets a payout of up to 50% of profit attributable to shareholders, with no floor; the FY2026 payout was 13%.

After the IPO, Uptown Paradise Sdn Bhd (UPSB), the founders' holding company, owns 34.4%; Iris Pallida Sdn Bhd (IPSB), Creador's investment vehicle, owns 19.3% (16.3% if the over-allotment is exercised); and Lee and Lim hold a further 7.3% and 3.7% directly.

Where the money actually goes

Look at the flows rather than the totals. More than two-thirds of the RM2.03 billion goes to the sellers, not the company. Creador’s IPSB sells 863.7 million shares for RM932.8 million, about 38% of its stake, and stands to receive another RM243 million if the over-allotment is used. In December 2023, IPSB and UPSB subscribed for new shares to help pay for Caring at RM7.42 each, which is RM0.1855 after the 40-for-1 share split in August 2026. The IPO price is 5.8 times that level, three years later.

Of the money that does reach the company, nine ringgit in ten goes straight to the banks. That is sensible capital management: borrowings stood at RM1.36 billion at 30 June 2026, most of it taken on to buy Caring and Medispec. The listing primarily repairs the balance sheet, while also supporting expansion.

The 40 to 50 new outlets a year are to be paid for from internal cash, at RM280,000 to RM420,000 of fit-out each plus RM450,000 to RM650,000 of opening stock, recruitment and training, helped by the lower interest bill after repayment.

The RM30 million for the new distribution centre only part-funds the land; the existing Bukit Raja centre was running at 80.2% utilisation at September 2026, which the prospectus calls sufficient for present needs, with capacity expected to approach full within five years. The remaining capital requirement deserves attention. The company has not yet identified land for the new centre, aims to start looking in the first quarter of 2027, and says it cannot yet estimate the total cost. The 36-month window for spending the RM30 million is not a commitment to commission the facility in that time: the prospectus allows up to five years from listing to develop and build it.

The banks sit on both sides of the deal. Maybank and RHB are joint principal advisers and bookrunners, and are also lenders to the company and to both selling holding companies. IPSB will use about RM400 million of its sale proceeds to repay Maybank and UPSB about RM136.5 million to repay RHB. By our arithmetic, the two banking groups receive about RM1.08 billion across the company’s repayment and the holdcos’ repayments. The prospectus discloses this fully and appointed AmInvestment Bank as an independent principal adviser to manage the conflict. It is legal, ordinary in Malaysian IPOs, and still worth knowing: the people pricing the deal are also among the people it pays.

Lock-ups are six months for every controlling holder, the founders and Creador included. Promoters and substantial shareholders will hold about 61.6% after the IPO, so the first test of supply arrives in May 2027.

A few governance details are worth knowing, none of them hidden.

Brego Life Sciences, whose directors and major shareholders include Lee’s mother, is a related party on both sides of the ledger: Big Caring bought RM48.0 million of products from it in FY2026 (1.7% of cost of sales), sold it RM25.4 million, and Brego is a major shareholder in the Yanling manufacturing subsidiary. The sums are small and disclosed; how the audit committee polices them is what to watch.

A later Creador fund, Creador VI, has invested in FPT Long Chau, a Vietnamese pharmacy chain, which the prospectus lists as a potential conflict as Big Caring looks abroad.

The lock-up terms carve out existing pledges of promoter shares to the two lending banks, 3.44 billion shares under UPSB’s facility with RHB and 1.36 billion under IPSB’s facility with Maybank; the holdco loans are to be repaid from the sale proceeds, and the prospectus does not say whether the pledges are then released.

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The financial scoreboard

The growth is real, though most of it was bought. Revenue rose from RM1.11 billion in FY2023 (year to June) to RM4.02 billion in FY2026, a 53.6% compound annual rate driven largely by Caring.

The organic engine is steadier: same-store sales growth (the sales increase at outlets open at least two years) was 7.3%, 9.6% and 7.3% over FY2024 to FY2026. Profit attributable to shareholders went from RM37.0 million to RM191.6 million.

The margin line needs care. Gross margin jumped from 24.8% in FY2025 to 30.1% in FY2026, but part of that is an accounting change: from July 2025, product rebates from suppliers are booked as a reduction in the cost of goods rather than as other income. Restating FY2025 on the new basis, by moving its RM32.3 million of product rebates out of other income and netting them against cost of sales, gives a like-for-like FY2025 gross margin of about 25.7%. The company’s own comparable measure, “total income” (gross profit plus other operating income, over revenue), rose from 28.8% to 33.7%. That is a genuine step-up of about five percentage points in one year.

Underneath the headline profit sit three items that will not recur in the same form: listing costs, a non-cash charge on a put option, and interest on the debt the IPO repays. The first two fall away: FY2026 carries RM12.0 million of listing costs and RM10.5 million of non-cash charges on a put option over a subsidiary’s minority stake, neither tax-deductible. The third shrinks: FY2026 carries about RM62 million of bank interest, and the IPO repayment removes RM26.3 million a year of it. Because interest on the acquisition loans was largely non-deductible (the effective tax rate was 34.2% against the 24% statutory rate), most of that saving falls straight to profit.

Remove the one-offs and add back the saving, and FY2026 profit attributable to shareholders would have been about RM240 million, or 3.26 sen a share. At RM1.08 that is about 33 times, against a 35.7 times median for the Bursa retailers the prospectus uses as peers: 99 Speed Mart, Mr D.I.Y., Eco-Shop and 7-Eleven Malaysia.

That RM240 million is the right starting point for the forward view. Our base case below reaches RM313 million in FY2028, which is growth of about 14% a year from that base, not the 50%-plus of recent years, and part of even that comes from buying out a minority stake rather than from the shops.

Minority shareholders also take a meaningful slice. Big Caring owns many outlets through subsidiaries in which pharmacists, area managers and the founders of acquired chains hold stakes, and those minorities took RM40.2 million, or 17.3% of after-tax profit, in FY2026. That is partly an operating model rather than pure leakage. Since 2000, Caring has offered selected pharmacists equity in the subsidiaries that run their outlets, which helps recruitment and retention. At its 2013 IPO, 59 of its 85 pharmacies were partly owned this way [1], and in FY2019 minorities took 19.2% of its profit, more than the 17.3% they take across the larger group today [3]. Most new outlets now open in wholly-owned subsidiaries, and the model is used only where required, so the share of profit reaching listed shareholders could rise over time, depending on how the wholly-owned and partly-owned outlets grow relative to each other. The cost is the cash for buyouts and, possibly, weaker local incentives.

Further down: whether the margin jump can last, where the cash goes, and what Big Caring has to earn for RM1.08 to look cheap.

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Revenue for the year to 31 July 2026 rose 17.7% to S$85.9 million, profit attributable to shareholders came in at S$1.4 million against a S$5.8 million loss [1], and KESM Industries, the Bursa-listed subsidiary that produces most of the group’s revenue, returned to profit, with revenue growth it attributed to demand for AI-related chips [2]. The shares went the other way. Sunright closed at S$0.400 on 29 October, 47% below the S$0.755 close cited in our 31 May update, and below both the S$0.59 bear case and the net-cash floor we described at initiation [3,4,5]. KESM closed the same day at RM4.69, almost exactly where it was in May.

The fall did not wait for the results. Sunright closed at S$0.69 at the end of June, S$0.50 at the end of July and S$0.445 on 28 September, the day the full-year numbers were filed [3]. The annual report, released on 26 October, added the detail that matters for the question we raised in May: how much of KESM’s improving business actually reaches a Sunright shareholder.

What the profit is made of

Sunright’s chairman attributed the return to profit to stronger volumes, new solutions and operational discipline “whilst monetizing underperforming assets” [6]. The last clause is the one the accounts can size. Gains on selling equipment and assets held for sale rose from S$0.46 million to S$2.83 million, against profit before tax of S$4.04 million. Interest on the group’s deposits added another S$2.04 million. Take both out and the remainder is a loss of S$0.82 million.

The S$0.82 million remainder is a sensitivity, not a measure of underlying profit: it leaves in finance costs, exchange losses and a S$0.25 million reversal of a receivables impairment, and it ignores tax and the minority share. Interest on S$88 million of deposits is real income, and selling idle equipment is a reasonable thing to do. But FY2026 does not yet establish that the operating business is sustainably profitable.

KESM’s numbers carry the same pattern. Its RM12.87 million profit before tax included RM8.34 million of disposal gains and RM5.76 million of interest. Other income also included RM1.2 million of compensation for unfulfilled minimum orders and RM1.0 million for accelerated deliveries [2]. The demand is real: KESM’s fourth-quarter revenue rose 14.9% to RM61.5 million, an increase KESM said was “largely driven by higher demand for our services in processing artificial intelligence” chips [2]. The profit is thinner than the headline.

Cash says the same. Operating cash flow of S$16.07 million fell S$0.74 million short of the S$16.80 million spent on equipment, and S$1.54 million of lease repayments widened the gap to S$2.27 million. Operating cash flow itself includes S$2.14 million of interest received and a S$0.40 million net tax refund. Additions to property, plant and equipment were S$23.58 million, S$6.78 million more than the cash paid. Part of that gap is new leases. Sunright attributes the S$9.0 million rise in trade and other payables “largely” to machinery and test equipment purchases, dividends payable and accrued expenses.

Corrections to our May coverage

Five statements in our May pieces were wrong, and two of them bear on the valuation. A sixth, our May measure of the premium itself, is revisited in the valuation section.

The first concerns the Texas environmental claim. On 10 May we wrote that Weatherford’s suit against Sunright’s US subsidiary “remains active as of the FY2025 annual report” [4]. It did not. Weatherford filed a notice of nonsuit, and on 10 October 2024 the Midland County court dismissed the claims against all defendants, including KES (USA) Inc., the predecessor of KES Systems, Inc. Sunright announced the dismissal on 11 and 25 October 2024, and note 30 of the FY2025 annual report records it [7,8]. The dismissal was without prejudice, so Weatherford can re-file, and Sunright has made no provision. The FY2026 annual report carries no litigation note.

The second is the floor. At initiation and again on 31 May we treated roughly S$0.55 a share of net cash as supporting the share price [4,5]. That figure is consolidated: it counts all of KESM’s cash, and KESM held RM217.4 million, about S$68 million, or 77% of the group’s S$88.3 million [2]. KESM’s other shareholders have a 51.59% economic interest in it. The parent company’s own balance sheet shows S$18.1 million of cash against S$5.2 million of borrowings, S$0.105 a share. Taking Sunright’s 48.41% of KESM’s net cash plus the parent and the wholly owned subsidiaries gives about S$39 million, or S$0.32 a share, on our calculation. None of these is a liquidation value, but S$0.32 is the closest of the three to Sunright’s proportionate claim on group cash, and the shares are only 26% above it.

The other three are smaller. Our 31 May update counted the 6-sen dividend KESM paid on 28 October 2025 as part of FY2026; KESM’s filing shows it was the FY2025 dividend [2,5]. Our 9 and 10 May pieces described the S$5.3 million of FY2025 Singapore revenue as a Singapore equipment business, and the 9 May piece called the parent loss-making at entity level; the S$5.3 million is revenue by customer location, the parent’s stated activities are investment holding and management services, and its own accounts show a profit of S$332,000 in FY2025 and S$372,000 in FY2026 [4,9]. The 9 May piece put FY2025 dividends leaving the group at S$5.5 million; actual FY2025 cash dividends leaving the group were S$504,000, all paid to KESM’s minority shareholders [9]. In FY2026 payments to those minorities rose to S$839,000; including S$246,000 paid to Sunright shareholders, total external dividends were S$1.085 million.

Sunright’s profit is KESM’s profit

Sunright’s 48.41% of KESM’s FY2026 profit comes to about S$1.44 million in Sunright’s own accounts, derived from the S$1.54 million the group allocated to KESM’s minority shareholders. Sunright’s attributable profit was S$1.42 million. Everything outside KESM, from the parent company to the wholly owned equipment, US and Philippine subsidiaries, contributed roughly nothing to what shareholders earned in FY2026, on our calculation, and that is after the parent’s fee income from KESM.

That changes what the Sunright share price has to be measuring. In May the argument was that the SGX listing carried a premium for a parent business the Bursa listing did not see. The FY2026 accounts show the businesses outside KESM breaking even, and a share of KESM that earns the group’s entire profit.

Below the break: Sunright’s holdings outside KESM now trade at S$18.3 million, 0.92 times estimated book and close to the parent’s S$17.7 million of net cash and one receivable. KESM paid Sunright RM9.96 million in cost-plus management fees, with the mark-up undisclosed. And one of our May tests fired on its wording but not its logic, while all three bull-case thresholds were missed.

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Indocyanine green products from Zydus and Provepharm have reached the US market, and the company reports "increasing pricing pressure and changes in customer purchasing patterns" [1]. It expects this to weigh on fourth-quarter revenue, and on both US revenue and US profitability next year.

The third quarter was still strong against last year. Revenue was US$44.6 million, up 44% on US$31.0 million a year earlier; the US grew 47% and the rest of the world 32% [3]. Against the second quarter it was not. Group revenue slipped from US$45.2 million to US$44.6 million. US revenue rose from US$33.9 million to US$35.2 million, while rest-of-world revenue fell from US$11.4 million to US$9.4 million, which the chief financial officer put down to distributor order timing and a seasonally slow July in Europe [2, Q5][3].

The warning sets a ceiling but no floor. With US$131.8 million booked by September, a full year below US$175.0 million needs only fourth-quarter revenue under US$43.2 million, just over 3% below the third quarter. The company has not said how far below the range it expects to land, and is not giving a new number [2, p4]. A small miss and a large one both fit the words.

The cut comes ten weeks after a reaffirmation. On 20 August, responding to a Business Times article on the rival approvals, the board said there had been "no material change to the Company's business or outlook arising from these developments" that required a revision, and kept the US$175 million to US$185 million range, "with revenue in 2H2026 expected to exceed that of 1H2026" [13]. A second half above the first needs fourth-quarter revenue above about US$42.6 million; a full year below the range needs it below US$43.2 million. Both can hold at once, so the miss could be narrow. Yesterday's release does not repeat the second-half commitment.

The company is also publishing less from here. The chief financial officer said: "we no longer consider it appropriate to disclose certain operating metrics, including sales volumes, average selling prices and detailed market segment information, at the same level as previously" [2, p4].

Where we were too comfortable

In August we wrote that the rivals’ real impact “builds through the second half and lands with weight in 2027”, that “the first hard evidence in the numbers is a 2027 event”, and that “the near-term numbers still favour the company” [4].

The timing was too generous. Management now expects the effect in the fourth quarter of 2026. That is a forecast, not a reported result, but it brings commercial pressure into guidance earlier than our August framing allowed.

The slow-switching argument was right about the forces involved and wrong about their strength. Management still cites supply reliability and familiarity as reasons hospitals stay, and says hospitals "may initially trial new suppliers while continuing to rely on established products" [2, Q3, Q12, Q13]. What changed is speed. By the briefing, less than three months after the Zydus approval, management said "some channel customers have informed us of competing products available at lower prices and have provided us with opportunities to respond" [2, Q20]. That is a buyer asking for a matching price. The company did not say how many asked, how many moved, or at what price.

The rivals, on the FDA’s record

The FDA's public records fill part of the gap the company left.

Zydus has been selling since August. The FDA's list of Competitive Generic Therapy approvals records the first commercial marketing of Zydus's generic on 4 August 2026, the day after approval [7]. In August we wrote that Zydus had not yet begun commercial marketing [4]. On the FDA's record it had, eight days before UltraGreen reported its half. Provepharm's ZYOGREEN was listed with the FDA from 16 July, but Sagent, its US distributor, announced commercial availability only on 22 September [8][9].

The field is also wider than we described in June.

The FDA lists five approved US ICG applications held by four companies: UltraGreen's IC-GREEN and its own generic, Stryker's SPY AGENT GREEN kit, approved in 2018, and the two newcomers [6]. In June we wrote that UltraGreen held both approved applications [11]. That missed Stryker's approval, although the same article put Stryker's share of US vials at about 17%. The generic UltraGreen has relaunched is its own 2007 approval, already sold under Olympus's label and inside Karl Storz kits [6][8].

The field is also wider than we described in June. The FDA lists five approved US ICG applications held by four companies: UltraGreen’s IC-GREEN and its own generic, Stryker’s SPY AGENT GREEN kit, approved in 2018, and the two newcomers [6]. In June we wrote that UltraGreen held both approved applications [11]. That missed Stryker’s approval, although the same article put Stryker’s share of US vials at about 17%. The generic UltraGreen has relaunched is its own 2007 approval, already sold under Olympus’s label and inside Karl Storz kits [6][8].

The next date matters more for 2027. Zydus’s approval carries 180 days of exclusivity under the FDA’s Competitive Generic Therapy programme. Until it ends, the FDA cannot approve another generic of the same drug. The clock runs from the first sale, so it ends about 31 January 2027 [7].

After that, the FDA is free to approve other generics, but none is assured, and pending applications are confidential. What is public is who supplies the ingredient. Seven companies hold active US drug master files for ICG, the dossiers a generic applicant can reference, and six of them filed since December 2021 [10]. The FDA does not approve these files, and a filing does not prove commercial supply or a coming generic.

What the records do not show is price. We have not established comparable realised US net prices for either rival, and UltraGreen says it has no direct visibility of competitors' contracted prices [2, Q8]. Zydus's coming quarterly results are where a rival could first put a number on its ICG sales.

The defence is the same vial at a lower price

UltraGreen's answer is to sell its own generic. It relaunched one through its main channel partners in late September or early October, alongside the branded IC-GREEN [1][2, Q10]. Its executive vice president for the Americas said: "There is no chemical difference or difference in labelling between our branded and generic products." The generic is priced lower [2, Q2]. Manufacturing costs are "broadly similar, with only minimal differences" [2, Q4].

So every hospital that moves from the branded vial to UltraGreen's own generic keeps the sale inside the company and gives up gross profit on it. In August we put the cost of making a vial at about 13% of what UltraGreen charges, on an 87% gross margin [4]. A cheaper vial with the same cost carries less margin, and IC-GREEN holds its premium only where a buyer chooses to keep paying it.

The company has two reasons to accept that.

The first is access: US purchasing channels "often favour generic alternatives when these become available", and a generic lets UltraGreen take part in their purchasing and discount arrangements [2, Q2, Q16].

The second is share: relaunching the generic, management said, "allows us to compete more effectively and defend market share" [2, Q2]. A sale lost to its own generic still earns a margin; a sale lost to Zydus earns nothing. It also intends to keep "premium pricing" on IC-GREEN [2, Q7], resting that on its supply record, physician familiarity and an orphan drug designation for liver cancer imaging, which could bring exclusivity for that indication after further clinical studies and approval [2, Q3, Q22].

One answer in the briefing works against the brand. ICG, management said, is "in most cases" not separately reimbursed in the United States; its cost sits inside the payment for the surgical procedure [2, Q17]. On our reading, a hospital that buys the cheaper vial keeps the saving, and the company itself names hospital procurement teams as the buyers for whom price matters most [2, Q12]. With the products chemically identical, that is a standing reason to switch.

We can describe the trade. We cannot size it. UltraGreen will not disclose the branded and generic sales split, the price gap, or the margin on either product, and it has about three weeks of sales data on the relaunched generic [2, Q7, Q10]. Still, a larger generic share would lower the blended US selling price even if branded prices hold. Because the generic costs about the same to make, the shift would reach gross profit, but gross margin will not isolate it. Geography and product mix move the percentage too, and a margin can stay high while gross-profit dollars fall. The first half's 86.6% [4] is one useful, imperfect indicator, to be read with revenue, gross-profit dollars and operating costs.

On cost, the accounts give a rough scale. In the first half UltraGreen's group cost of sales was US$11.6 million on 589,511 vials sold worldwide, about US$20 a vial, of which US$9.1 million was the product itself [12]. That is an accounting average, not a disclosed US unit cost, and distribution and administrative costs sit outside it.

Set beside a realised US price of about US$173 [4], it still shows that the cost of making a vial is not yet where the contest lies. It becomes one if prices fall toward cost, and there UltraGreen has no visible edge.

Its vials are made under contract by Patheon Italia or by LyoContract in Germany. Stryker's SPY AGENT GREEN comes from the same Patheon Italia. Zydus makes its generic in its own plant in Vadodara, India [8]. Owning the plant may give Zydus a cost advantage over a company paying contract manufacturers, but scale, yields and contract terms also matter, and neither company discloses unit costs.

Below the paywall: what UltraGreen has stopped telling investors, what the tax approval does to our profit estimate, and how much of the share price is cash.

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On the numbers it chose to lead with, the price looks reasonable. Revenue in the six months to June 2026 was US$53.7 million, up 109.5% on the same half of 2025, and profit of US$14.3 million was larger than the whole of FY2025. Annualise that half and the offer price is 24.4 times earnings for a supplier whose end-customers the prospectus describes as among the world’s largest technology and chip companies.

The production line tells a different story from the revenue line. Spheres produced rose 22.0% over the same period. Revenue per sphere produced rose 72%. In the same months, the price of silver rose 140% and the price of tin 56%. Yet preliminary third-quarter figures in the prospectus show revenue rising again and gross margin holding near 48%, even as benchmark metal costs fell. The question is how much of the earnings improvement will last, and how much cash it will produce.

From a Tainan solder plant to a Singapore listing

The operating company is older than the listed one by 28 years. Accurus Scientific was incorporated in Tainan in 1998 to make ball-grid-array (BGA) solder spheres, solder bars, solder powder and copper wire for chip assembly. The Accurus brand survives on the product today. In 2006 Henkel’s electronics group bought the business, which gave it customers in the United States and Europe. Management bought it back in 2010. It developed proprietary alloys for wafer-level packaging and patented processes for making spheres.

A Singapore sales office followed in 2016 and a second factory, in Ningbo, in 2017, with commercial production there from 2021. That year Mi Technovation Berhad (MiTB), a Malaysian maker of semiconductor equipment listed on Bursa Malaysia, bought 99% of Accurus for RM271.01 million, paid entirely in new MiTB shares [3]. MiTB folded it in as its Semiconductor Material Business Unit. A Malaysian subsidiary, set up in 2024 to build a third plant in Senai, Johor, completes the group.

The Singapore holding company was incorporated on 28 April 2026. MiTB transferred the operating subsidiaries into it ahead of the listing.

At S$1.80 a share, the offer consists of 51.5 million new shares and 26.0 million existing shares sold by MiTB. A further 41.9 million new shares go to seven cornerstone investors: abrdn (Singapore and Malaysia), Amova Asset Management (formerly Nikko), Areca Capital, Barings, Fullerton and Manulife. MiTB will retain 73.7%, or 72.7% if the over-allotment option is exercised in full. Its Group CEO and controlling shareholder, Oh Kuang Eng, chairs Mi Material.

What a solder sphere does, and who pays for it

A modern chip package has hundreds to tens of thousands of electrical connections on its underside. Solder spheres form many of them. They are placed on the package substrate, melted and re-solidified to bond the package to a circuit board, or one layer of a package to another. Mi Material makes spheres from 0.030mm to 0.889mm in diameter. Smaller spheres fit more closely spaced connections, known as a finer pitch. They are also harder to make consistently. A single defective joint can scrap an expensive multi-chip AI package.

The company sells four product lines. Standard tin-silver-copper (SAC) alloys such as SAC305 (3.0% silver, 0.5% copper, the rest tin) are the commodity end. Cyclomax and iSAC are proprietary alloy families aimed at reliability under heat and current, and at fine pitch. A residual “others” line includes copper-core spheres, solder paste and a small chemicals distribution business in Singapore.

The two proprietary families grew from about 34% of revenue in FY2023 to 60% in 1H2026. This shift supports the company’s explanation for higher margins. It does not disclose units sold by product, so we cannot tell how much came from selling more proprietary spheres and how much from higher relative prices.

Mobility and wearables supplied 61.7% of revenue in 1H2026, HPC and memory 31.1%, and automotive and renewable energy 7.2% [1].

This is still predominantly a consumer-device supplier. High-performance computing (HPC) and memory serve AI as well as other computing applications; the company does not report AI or HBM sales separately. The whole 31.1% should not be read as AI revenue.

Mi Material has two types of customer.

• Its direct customers, labelled A to I in the prospectus, place the orders and pay the bills. They include outsourced semiconductor assembly and test companies (OSATs), foundries that manufacture chips, and integrated device makers that design and manufacture their own chips. The top five direct customers supplied 41.4% of 1H2026 revenue; the two largest have bought from Mi Material for 16 and 22 years.

• End-customers, labelled X, Y and Z, specify and qualify materials for the chips they design. That limits a manufacturer’s freedom to switch suppliers, but it does not remove its role in procurement. Price, delivery and factory requirements still matter, and Mi Material negotiates selling prices with customers. The roles can overlap: direct Customer C belongs to end-customer Z’s group and buys exclusively for Z [1].

The prospectus leaves these end-customers unnamed, but their profiles strongly suggest Apple (Customer X), Broadcom (Customer Y) and Micron (Customer Z). These identifications are our inference, rather than company-confirmed names.

• Customer X, a multinational technology company with premium consumer electronics, its own operating systems and a retail presence in more than 150 countries, accounted for 24% of revenue in 1H2026, up from 20% in FY2023.

• Customer Y, one of the world’s largest chipmakers, whose devices include ASICs used in data centres, networking and AI products, accounted for 18%, up from 13%.

• Customer Z, a US memory maker whose products include high-bandwidth memory (HBM), accounted for 16%, up from 10% in FY2025. Its rising share is the clearest sign in the filings that memory demand is becoming more important.

Those orders are served by 19 production lines: 13 in Tainan, running at 80% to 85% of capacity in 1H2026, and six in Ningbo, at 10% to 15%. Ningbo has made an operating loss since commercial production began.

Johor will add an alternative production site for regional customers currently supplied from Taiwan. Its first three lines are due to be ready in 4Q2026, with customer qualification and ramp-up following in 2027. Tainan is also due to add four lines, with work starting in 2027 and operations planned for 2030. Together, the projects would lift annual capacity from 6,600-8,900 billion spheres to 11,340-15,260 billion.

A small market growing fast

The industry consultant Yole, commissioned for the prospectus, sizes the global solder sphere market at about US$220 million in 2023 and the segment Mi Material actually serves, which excludes electroplated bumps and hybrid bonding, at about US$173 million [2]. Yole forecasts that serviceable market to reach nearly US$978 million by 2031, growth of about 23.5% a year from 2025 [2]. It estimates Mi Material’s 2025 share at 17% of the whole market and 24% of the serviceable segment, which it reads as a top-three position [2].

Yole expects computing to drive much of that growth. Across the broader market, which Yole expects to reach about US$1.9 billion in 2031, HPC and memory rise from US$55 million in 2023 to US$969 million in 2031. Their share of market value increases from 25% to 50%, while mobile and wearables fall from about 63% to 41% [2]. AI accelerators and HBM stacks use larger packages with more connections, and the finest-pitch spheres command the highest prices.

Yole’s forecasts measure industry revenue, not sphere volumes or Mi Material’s own sales mix. Higher metal prices lift the selling price of spheres and therefore the reported market size. Part of Yole’s 26.2% annual market growth for 2023 to 2025 reflects that effect [2].

Results from two major chipmakers point to strong demand in the markets Mi Material wants to serve. TSMC, a foundry that manufactures chips for designers, reported third-quarter US-dollar revenue up 41.2% year on year and guided to another increase in the fourth quarter [15]. Micron, an integrated device maker that designs and manufactures memory, reported record fiscal 2026 results and expects a stronger fiscal 2027 [16]. They offer a view of logic-chip and memory demand respectively; neither is identified here as a confirmed Mi Material customer. Their sales also reflect chip prices, so the growth cannot be translated directly into sphere orders.

What protects the margin, and where the protection is thin

Mi Material’s margins suggest it has an advantage. In 1H2026, it earned much higher gross and operating margins than the three listed solder-sphere makers Yole names as peers.

The comparison has limits. Shenmao reports tin bars, balls and wire as a single line, two-thirds of its revenue; Duksan’s broader solder category is 63% of its revenue; solder spheres are about 3% of MK Electron’s [9][11][12]. Their group margins reflect different product and business mixes.

Customer qualification offers a reason Mi Material may sustain a premium. Approval of a new sphere supplier typically takes 12 to 24 months, and up to five years or longer for the most demanding advanced packages. Once a sphere is in an end-customer’s bill of materials, changing it means requalifying. With advanced packaging alone costing several hundred to more than US$1,000 per package [1], small savings on spheres may not justify the risk of a failed connection.

The weaknesses are as concrete. The company sells on purchase orders with no minimum volumes and no long-term contracts. It buys its metal at spot, with no hedging, and negotiates selling prices with customers; the timing of purchases and repricing can affect margins. Its R&D spend was 1.4% of revenue in 1H2026, from 3.0% in FY2023, with 25 R&D staff, all in Taiwan.

Metal supply is concentrated. ThinTech Materials Technology accounted for 50.4% of purchase spending in 1H2026, up from 37.5% in FY2023; the top two suppliers accounted for 71.4% [1]. ThinTech is listed on Taiwan’s Taipei Exchange (3663) and belongs to Taiwan’s China Steel group, with a substantial precious-metals processing and trading business [20]. Mi Material’s relationship with it spans 18 years. The concentration deserves attention, although the percentage measures spending: higher metal prices can increase it without an equivalent rise in physical dependence.

Proprietary products and established customer relationships did not prevent the last downturn. During the industry’s FY2023 inventory correction, revenue fell about 15% and the pre-tax margin dropped from 21.2% to 14.3% [5]. The product mix is stronger today: proprietary alloys supplied about 34% of revenue then, against 60% in 1H2026.

The financial scoreboard

The starting year matters. The prospectus’s 28.1% annual revenue growth over FY2023 to FY2025 begins in a downturn. Measured from FY2022, growth to FY2025 was about 11.6% a year in US dollars.

The first half of 2026 is a clear step up: gross margin reached 45.9%, almost five percentage points above the best of the preceding three full years, and half-year profit exceeded the previous full year’s by 43%. Currency movements helped too. A US$1.69 million exchange loss in 1H2025 became a gain of about US$0.4 million, accounting for roughly US$2.1 million of the US$14.5 million increase in pre-tax profit.

The prospectus’s preliminary 3Q2026 estimates extend that improvement: revenue of US$37.8 million, up 15.6% from the second quarter, and gross margin of 47.5%, against 48.0%. These are unaudited estimates based on management accounts available on 2 October; a fuller business update is still to follow. Management attributes the revenue increase mainly to higher sales volumes, with a similar proportion of specialty alloys and fine-pitch spheres [1]. That supports the demand case, although the company also notes its usual second-half seasonality.

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Production rose 22%. Revenue per sphere produced rose 72%

The company does not disclose how many spheres it sold, only how many it made. Spheres produced across Tainan and Ningbo rose 22.0%, from 1,780 billion in 1H2025 to 2,171 billion in 1H2026. Production is not shipments: finished-goods inventory rose by US$3.4 million in the half, and a small part of revenue comes from products other than spheres. If sales tracked production, and each sphere earned what it earned a year earlier, revenue would have risen by only US$5.6 million. Instead, it rose US$28.0 million, about five times as much. On that assumption, volume accounts for about a fifth of the growth, and the other US$22.4 million came from higher prices, a richer mix, or both.

Metal prices are the first place to look. World Bank monthly benchmarks show average silver prices rising 140% between the two halves, from US$32.80 to US$78.75 an ounce, and tin rising 56%, from US$32,097 to US$50,160 a tonne [8].

The 1H2026 averages also exceeded earlier nominal price peaks: US$42.70 an ounce for silver in April 2011 and US$43,983 a tonne for tin in February 2022 [8]. For comparison, Accurus paid between US$14.13 and US$19.31 an ounce for silver over 2017 to 2019, before MiTB bought the business [3].

To show the combined effect on alloy costs, we use SAC305: 96.5% tin, 3% silver and 0.5% copper by weight. Our illustrative “metal basket” measures the benchmark cost of those ingredients in one kilogram of alloy. It roughly doubled from US$63 in 1H2025 to US$124 in 1H2026. This is a reference point, not Mi Material’s actual product mix or purchase cost.

Management attributes the 1H2026 revenue increase to higher volumes, more specialty and fine-pitch spheres, and higher selling prices as it passed on rising raw-material costs. Silver and tin made up 89.2% of purchase spending in the half [1].

The peers show that the boom extends beyond Mi Material. Their revenue rose 57% to 65% in the same half [10][11][12]. Shenmao and MK Electron widened their gross margins; Duksan’s slipped from 19.8% to 19.5%. All faced rising metal prices, but their different margin outcomes leave room for company-specific pricing and product effects.

AI packaging can also change what customers buy. More complex packages need different numbers, sizes and types of connection. Smaller spheres are harder to make, while some powerful computing chips need larger spheres that use more metal [1]. Higher-value sales can therefore come from several changes in product mix.

Higher metal costs alone cannot explain the gross-profit gain. Passing those costs to customers dollar for dollar raises revenue and costs equally, leaving gross profit unchanged. Mi Material’s gross profit rose US$15.1 million.

Assuming sales tracked production, 22% more volume at the old gross profit per sphere would explain only US$2.1 million of that increase. That leaves US$13.0 million to explain. Possible contributors include higher-value products, stronger pricing, markups on metal, selling prices rising before older inventory costs catch up, and fixed factory costs spread over more output. The accounts do not separate these effects.

The quarterly pattern gives a better clue to how much may last. Our SAC305 basket fell from about US$128 a kilogram in 1Q2026 to US$121 in 2Q and US$113 in 3Q. Tin and copper rose between the first and third quarters, but silver’s decline more than offset them [8].

Over those quarters, revenue rose from about US$21.0 million to US$32.7 million and an estimated US$37.8 million. Gross margin rose from about 42.7% to 48.0%, then held at an estimated 47.5%. Together with management’s account of higher Q3 sales volumes, this weighs against an improvement driven entirely by metal prices. Pricing and inventory timing could still affect margins; the accounts do not establish how much.

Our illustrative calculation puts at-cost metal pass-through at 14% to 41% of revenue growth, depending on the assumed metal share of costs; the data notes set out the assumptions. The profit gain needs more than pass-through to explain it. By September, silver averaged US$64.6 an ounce, 30% below January’s US$92.1 peak [8]. That gives investors a useful test: can margins hold and profit turn into cash as the metal tailwind fades?

Below: the cash tied up in growth, where the seller’s money is going, and what the S$1.80 offer price assumes about future earnings. Our three valuation scenarios range from S$0.68 to S$2.92 a share.

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These are the year-on-year figures.

They answer a narrower question than they appear to, because the half being compared against, the six months to June 2025, is the half immediately before this company's revenue base was rebuilt.

Set the same figures against the half that actually preceded the period, the six months to December 2025, and the direction reverses. Revenue fell 11.0%. Gross profit fell 12.9%. Profit attributable to owners fell 32.1%.

That comparison is available because the prospectus carries the audited full-year accounts on the same basis as the interim statements [2], so the second half of FY2025 can be derived by subtraction.

There is nothing wrong with the company leading on the year-on-year figures; the reporting rules ask for them. But the year is a strange stretch to measure across, because the customers changed almost entirely within it. US revenue fell from 70.5% of the total to 8.8%, Switzerland rose from 10.4% to 37.6%, and Hong Kong from nothing to 21.7%. Comparing the two ends of that is comparing two different customer bases. By the second half of FY2025 the new one had settled, so the December and June halves are the first that measure the same business twice.

The sequential comparison is not perfectly clean either. If the second half is genuinely the stronger season, then measuring a first half against a second half overstates the decline, and part of the 11.0% would be calendar rather than performance.

The filing also does not help to settle it. Its outlook says the Group "expects a stronger performance for the second half ended 31 December 2026 due to seasonality, that is higher shipment volumes during key festive periods in the fourth quarter" [1, page 20]. A note to the same statements, eleven pages earlier, says the Group's "businesses are not affected significantly by seasonal or cyclical factors during the financial periods" [1, page 9]. One document, filed on one day, points both ways, so how much of the 11.0% is seasonal it does not let anyone say.

Where the thesis stood

Our first look, published 30 July at the S$0.53 offer price, made several arguments. This half-year’s results let us test two of them directly. For the rest, we will need to wait for later periods.

The first was that the fifteen-fold revenue growth concealed falling profitability: gross margin dropped from 40.4% to 12.0% and profit to owners fell 25% from its FY2024 peak.

The second was that the revenue was not quite the company’s own, because roughly 90% of it arrived through customers referred by All-Link PRC, a China-based forwarder controlled by the husband of the controlling shareholder and expressly outside the listed group.

We put the offer at about 9.9 times trailing earnings, in line with size-matched regional forwarders rather than cheap, and at about 2.8 times book against a peer median just under 1.0. The closing line was that at close to ten times a falling earnings line, the market was being asked to pay for a transition that had only just begun.

One thing in that piece needs correcting before going further. We treated the shift away from American revenue as something that might or might not happen after the listing. It had already happened, and the prospectus disclosed it. We read the operating-geography table, which reports by the entity booking the revenue, and did not read the customer-location table in the audited accounts, which reports on the same basis as these interim statements. Had we read it, we would have seen Switzerland at US$24.9 million, 33.6% of FY2025 revenue, matching the 33.6% the prospectus attributes to Customer A. The transition was largely complete at the offer.

The numbers, on both comparisons

Gross margin is where the two comparisons disagree least: down 0.92 points on the year, 0.25 on the half, and now 11.52%, the lowest on record.

Below the gross line, profit fell far faster than revenue, because costs rose rather than fell: administrative expenses nearly doubled from the half before, from US$1.3 million to US$2.5 million, US$1.0 million of it one-off listing costs. That is why profit before tax fell 35.6% and profit to owners 32.1%, against a revenue fall of 11.0%.

The company’s adjustment strips the US$1.0 million of listing costs to reach adjusted profit of US$3.4 million, up 11.6% year on year. It leaves in a US$0.4 million gain on the MF Logistics earn-out, though, which its own results release calls a “non-operating gain” [7].

Strip both and profit is about US$3.0 million, roughly flat on the June 2025 half and about 16% below the December one. That last figure is rough rather than exact: the gain is disclosed pre-tax in note 6 [1], so netting it against a post-tax number mixes bases.

The segment note localises the damage, though only year-on-year: the three-segment split is new this period, so there is no December half to measure against, and these figures compare with 1H FY2025. Singapore segment profit before tax fell from US$3,165k a year earlier to US$1,756k, down 44.5%, while its revenue rose 27.5%. The Philippines segment grew profit from US$397k to US$562k. Malaysia contributed US$487k against no comparable figure, since that segment did not exist a year earlier.

The filing does not disclose how the US$1.0 million of listing expenses is allocated between segments, so some or all of it may sit in Singapore. Even attributing the entire amount there leaves about US$0.4 million of the Singapore decline unexplained.

What the guidance requires, and what the filing says about it

Management expects FY2026 revenue to exceed FY2025, attributing the expected stronger second half to heavier fourth-quarter festive volumes [1].

The revenue bar is low, though not automatic. FY2025 revenue was US$74.1 million and the half just reported was US$40.1 million, so the second half needs only about US$34.0 million to match it, roughly 15% below the half just delivered. Even a repeat of this half’s 11% fall would produce about US$35.7 million and still clear FY2025. A full-year increase is therefore better read as the expected outcome than as evidence of momentum.

It also revives the seasonality contradiction flagged earlier: the outlook leans on a stronger festive-quarter half, while the “Seasonal operations” note says the business is not significantly affected by seasonal factors [1, page 9]. The two need not strictly conflict, since the note concerns whether seasonality distorts the period presented while the outlook concerns whether the fourth quarter carries more volume than the rest of the year. Still, they are an odd pair, and a reader leaning on the guidance is entitled to ask which one management means.

Thesis check

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The pattern was familiar. Again and again, the headline number said one thing, while the operating business said another. That gap — between what companies disclose and what investors actually understand — is exactly why we started The SEA Analyst.

August in Review

Not every update warranted a standalone email, so this roundup brings the reporting cycle together. Each header links to the full article.

HL Global (AVX), 7 Aug The board said recurring profits have not been sufficient to support dividends, and the market is pricing exactly that.

JustCo (JCO), 10 Aug The SEA organic business is improving, but the reported profit was an accounting gain and the revenue growth came from a consolidation rather than new business.

Jollibee (JFC), 11 Aug Record headline profit, but overseas earnings went backwards, net debt rose ₱12 billion, and the Wall Street re-rating thesis is quieter, not louder. Since publication: Jollibee has confirmed Hong Kong over the US as the venue for its international unit listing.

Foundation Healthcare (FHH), 17 Aug The reported profit was distorted by a pre-IPO swap structure that ended on 1 July, the day after the first-half closed; the number that matters, core margin, moved down.

Sheng Siong (OV8), 20 Aug The 31.8% gross margin confirms the quality thesis, but the S$520 million Sungei Kadut build now governs the stock.

UltraGreen.ai (ULG), 20 Aug Two US approvals have appeared — Zydus in August, Provepharm in July; the moat is real, and how far competition erodes it is the open question.

Haw Par (H02), 21 Aug Strip out last year's anniversary special dividends and the income stream is intact; at S$15.06, the market caps the company below its UOB and UOL stakes alone.

Q&M Dental (QC7), 22 Aug Core dental profit grew 10%, but Q&M is committing close to a third of its market value to a pan-Asian rollup across three markets at once.

Centurion (OU8), 23 Aug Revenue grew 31% and core profit grew 34%; reported EPS fell 64% because of CAREIT minority interests and non-core valuation effects, not the operating business.

HRnetGroup (CHZ), 24 Aug Singapore posted its first gross-profit rise in three years, and management for the first time framed the company around unlocking value for minority shareholders — the language has moved; the action has not.

PropNex (OYY), 26 Aug The thesis held through the launch drought with market share rising in every segment, but profit fell 3.1% on flat revenue and that margin compression is worth watching into the second half.

Hafary Holdings (5VS), 30 Aug Singapore held, but the Kluang plant lost more money on less revenue — the thesis has one more half to show that the miss was timing, not structure.

Tiong Woon (BQM), 1 Sep Revenue and profit both hit records for the full year; the stock still trades at half its book value.

A Coverage Status System

Every company we cover carries a thesis.

But theses age at different rates — some are live and moving, others are valid but waiting, and a few have run their course. Treating all of them the same way would mean updating when there is nothing new to say, and going quiet when something is actually happening.

Active Coverage means the thesis is live and we are tracking it. Expect updates when material developments occur.

Catalyst Watch means the thesis is valid but the trigger is indefinite. The company is not a value trap — there is no structural reason the discount never closes — but there is no near-term catalyst and no management action expected. We will not send regular updates on Catalyst Watch names, but we will revisit when the facts move.

Stop means the thesis has closed — either because the discount is structural with no credible path to close, or because the investment case now depends on a factor that is unlikely to materialise.

Going forward, every company in our coverage carries one of these statuses. The full list, all nineteen names with status and rationale, is in our coverage map.

What We Are Working On

Over the next three to six months, three areas are where we will be watching most closely and where most of our new initiations will come from.

Alongside these, we will continue reviewing IPOs as they come to market across the region. And where we find a company or angle that the market has significantly overlooked, outside of any planned sector, we will write about it.

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A Note on Feedback

Several readers have written in with corrections, privately and in the comments, and we value every one of them.

If the direction we are taking — whether it is the depth of analysis, the companies we cover, or the cadence — is not what you were looking for, write to us at research@theseaanalyst.com.

We have also heard kind words. Our OSAT sector survey was reposted by Unisem, one of the companies the survey covered. Prof. Mak of NUS wrote that "the market needs deep analysis like this more than ever as stock exchanges chase more listings" on our All-Link IPO Review. And privately, readers have written in with notes like: "Keep doing good work. Always looking for high quality SEA stock research."

We are grateful for all of it. We also post on LinkedIn. Find us here if you prefer catching the research that way.

Thank you for reading.

The SEA Analyst

The SEA Analyst is an independent research and education publication. It is not licensed or regulated as a financial adviser in any jurisdiction, and nothing we publish is financial advice or a recommendation to buy or sell any security. We do not publish price targets or forecasts of how a security will trade, and we disclose our own position in every piece. Do your own research, and consult a licensed professional before making any investment decision.

Thesis valid, no near-term catalyst. Updates only when something moves.

Thesis closed. No further updates.

Our 17 April 2026 initiation flagged three risks to watch:

1. A gross margin decline that might be a trend rather than a blip;

2. Revenue concentration in one business segment and one country; and

3. A capex-and-borrowings ramp that needed to translate into fleet use rather than idle equipment.

Two of the three moved the reassuring way this period: margin recovered almost to its prior peak, and capital expenditure moderated while gearing improved. The third, concentration, is where the result gets interesting, because it runs straight into a target management had set for itself seven weeks before these numbers landed.

In early July, The Business Times reported management’s goal of more than S$200 million in annual revenue by FY2030, alongside plans to grow beyond crane rental and deepen the company’s regional footprint.[8] FY2026 revenue came in at S$187.7 million, already 94% of the way to that five-year target, in year one. On the revenue-scale half of the ambition, the company is essentially there, and the target looks conservative rather than stretching.

The diversification half went the other way. Of the group’s S$24.2 million revenue increase, Singapore alone contributed S$25.6 million (more than the entire gain), which means that, taken together, everywhere else net-subtracted from revenue. The non-Singapore book shrank from S$44.4 million to S$43.0 million even as the group grew 15%. India was the one genuine bright spot, up 30%; Malaysia roughly halved and the Middle East fell 15%.

One weak year is not proof that the strategy has failed. India, the Middle East and Malaysia are small, project-driven markets, where a single heavy-lift contract won or lost can swing revenue by millions, so a soft year in them proves little on its own.

What it does show is a real gap between what management says it is building and what it just reported. That gap is also the most likely reason a result this strong barely moved the share price: investors may be weighting the Singapore concentration more heavily than the margin recovery. The rest of this update works through what changed, what didn't, and where the thesis now stands.

What Happened

Group revenue for FY2026 came in at S$187.7 million, up S$24.2 million or 15% from S$163.5 million in FY2025, driven mainly by the core Heavy Lift and Haulage segment, which grew 12% to S$179.6 million on higher activity in Singapore, India and Brunei. Gross profit rose faster than revenue, up 24% to S$76.4 million, because gross margin recovered to 40.7% from 37.6%, a 3.1-percentage-point improvement that management attributed to stronger margins within the Heavy Lift and Haulage book. Profit before tax rose 21% to S$29.5 million, and net profit attributable to equity holders rose 24% to S$23.9 million, taking earnings per share from 8.29 cents to 10.31 cents.

The balance sheet strengthened alongside the income statement. Cash and bank deposits rose to S$86.6 million from S$64.5 million a year earlier, while net gearing fell to 9.5% from 14.7%, as the pace of fleet capital expenditure moderated: gross additions to property, plant and equipment were S$53.6 million in FY2026, down from S$65.5 million in FY2025, and net cash capex fell more sharply, to S$23.8 million from S$45.2 million, with the cash outlay running well below gross additions, reflecting financing and timing effects. Net asset value per share rose to S$1.47 from S$1.39.

The proposed final dividend of 2.50 cents lifts the payout ratio to 24.2% of net profit, from 21.1% in FY2025, still a conservative payout given the company’s now-lower gearing and larger cash balance.

The FY2026 results were released after the market close on Friday 28 August[1], when the shares had closed at S$0.955.[9] In the first full session after the release, on Monday 31 August, they closed at S$0.965[9], up about 1%, a muted move for a result that lifted both revenue and profit growth above the prior year’s pace.

Prior Thesis Recap

Our initiation argued that Tiong Woon was a well-run, family-controlled industrial company trading at a significant discount to tangible asset value (roughly 0.5 times book, 9.2 times earnings and 3.6 times EV/EBITDA at the time), with cumulative ten-year free cash flow (~S$204 million) exceeding the market capitalisation (~S$183 million).[2]

The central risks flagged were the FY2025 gross margin decline from a 41.2% peak, heavy revenue concentration in the Heavy Lift and Haulage segment (98% of FY2025 revenue) and in Singapore (73%), and a capex-and-borrowings ramp that, if it did not translate into utilisation, would represent a capital-allocation misstep.

New Financial Data

The segment and geographic breakdowns behind the headline numbers matter more than the headline itself.

By segment, Heavy Lift and Haulage's profit before tax rose 23% to S$28.4 million on the higher revenue and improved margin; Marine Transportation's profit before tax fell 35% to S$0.8 million on lower inter-segment revenue and a smaller share of associate profit; and Trading swung to a S$0.3 million profit from a marginal loss, on a low base (external revenue up 282% to S$5.5 million, still under 3% of group revenue).

As a share of total revenue, Heavy Lift and Haulage eased slightly to 95.7% from 97.8%, but that improvement came almost entirely from the small Trading segment's low-base growth, not from a structural shift in the core business.

Geographically, the detail behind the headline is the single most important finding in this result, and it is a dollar story before it is a percentage one. Singapore revenue rose S$25.6 million, from S$119.1 million to S$144.7 million, larger than the group's entire S$24.2 million increase.

The rest of the portfolio, taken together, therefore shrank: non-Singapore revenue fell from S$44.4 million to S$43.0 million, a 3% decline in a year the group grew 15%. India was the exception, and a real one, up 30% to S$15.4 million. But Malaysia roughly halved, to S$3.7 million from S$8.0 million; the Middle East fell 15% to S$6.4 million; Indonesia and Thailand were flat-to-lower; and Brunei contributed a new S$1.3 million. On a share basis the same movement reads as Singapore rising to 77.1% of revenue from 72.9%, and non-Singapore falling to 22.9% from 27.1%, the opposite direction from the regional-diversification story the company's own outlook commentary continues to tell.[3][4]

Thesis Check

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The board declared a first-half dividend of 1.00 cent per share (an interim of 0.75 cent plus a special interim of 0.25 cent), against 1.25 cents in the same period last year, where the special component was 0.50 cent.

The decline was broad, but it was not even. The two distribution segments held up reasonably: General (retail and showroom) revenue fell 6.3% to S$59.5 million and Project (developer and contract) revenue fell 3.1% to S$39.0 million.

The damage was concentrated in Manufacturing, where revenue fell 27.7% to S$24.2 million. More important than the top line, the Manufacturing segment’s recurring EBITDA loss widened, from S$1.2 million in H1 FY2025 to S$2.7 million in H1 FY2026, and at the operating level (the group’s “ORBIT” measure) the segment lost S$4.1 million, against S$2.6 million a year earlier.

That single fact reframes the half. The bull case set out in April rested on the Kluang manufacturing operation moving toward breakeven and then into a 10–15% operating margin at scale. In its first reported period since the initiation, the segment moved in the opposite direction.

What the initiation said

The 19 April 2026 initiation described Hafary as a company that had “evolved from a single-product tile trader into a S$287 million revenue platform spanning distribution, project supply, and manufacturing across multiple geographies,” anchored on a 50–60% share of Singapore’s general consumer tile market built over four decades.

The central, explicitly stated question was whether the manufacturing segment, still approaching breakeven, could deliver on its promise of margin expansion and export-driven growth. If it did, Hafary’s earnings power would step up meaningfully. If it did not, the company would remain a well-run distributor with elevated leverage from its aggressive expansion phase.

The flip triggers attached to that thesis were specific. On the bull side, the case would break if manufacturing failed to reach breakeven by FY2026 (the breakeven point the initiation cited), if US tariff policy turned against Malaysian tile exports, or if Singapore construction demand fell materially below the BCA forecast. On the bear side, the case would strengthen if manufacturing reached a 10–15% operating margin at scale, if net debt to equity fell below 1.5x, or if a second or third overseas market matured past S$15 million.

The initiation carried an implied timeline, that manufacturing would be finding its footing around FY2026, and this half moved against it: the loss widened on falling revenue rather than converging on breakeven. That is what changed since April, and it is what this update has to make sense of.

The numbers, and the disclosure that reframes them

The single most clarifying disclosure in the filing is the geographic revenue split, because it relocates the entire decline.

Singapore revenue was essentially flat (S$79.5 million against S$79.7 million a year earlier, a 0.3% dip), so the domestic distribution core, roughly two-thirds of the group, did not weaken. The S$14.5 million fall came almost entirely from abroad, and it was concentrated: the United States dropped 42% to S$11.4 million (from S$19.7 million), Malaysia fell 28% to S$19.7 million, Indonesia collapsed to S$0.1 million from S$2.4 million, and China slipped to S$3.3 million from S$4.4 million, partly offset by a jump in Vietnam.

Those declining markets are the ones the Kluang plants predominantly sell into (the US export leg and Malaysian domestic demand), so the manufacturing-segment slump and this export-market slump are, on reasonable inference, the same event seen from two angles.

One caveat sits under that inference: the filing reports revenue by customer location, not by plant origin, so the link between the geographic decline and the manufacturing segment is a reasonable read, not a reconciliation the company discloses. Either way, the deceleration is not a Singapore construction story: the problem sits in overseas manufactured-tile demand, not the domestic franchise.

That also explains a number that would otherwise look strange: group gross margin rose, to 43.4% from 40.0% on the filing’s stated basis.

As the lower-contribution manufactured-and-export-linked volume shrank, the mix tilted back toward higher-margin Singapore distribution, lifting the blended gross margin even as revenue and profit fell. The profit decline, then, was not mainly a pricing or gross-margin failure: it was volume, higher inventory impairment, and operating deleverage on the manufacturing base.

That cuts two ways. It is reassuring, because a volume dip is easier to recover from than a collapse in pricing, and Hafary's margins in fact held up. But it is also the more concerning kind of finding, because the weakness is not spread across the business; it sits squarely in manufacturing and exports, the exact part the bull case depends on.

Beyond the snapshot, three further numbers matter more than the headline profit decline.

The first is operating cash flow, which fell 60% to S$9.3 million from S$23.4 million. Operating cash flow before working-capital movements was still healthy at S$26.2 million; the shortfall came almost entirely from working capital, which consumed S$12.7 million. Inventory alone absorbed S$8.2 million of cash, and a S$9.2 million reduction in trade and other payables took more. This is the mirror image of the FY2025 story, where operating cash flow had more than doubled to S$57.9 million on improved working-capital discipline. One soft half does not undo that, but it does show how quickly the cash conversion can swing when demand softens and inventory keeps arriving.

The second is inventory itself, which rose to S$132.4 million at 30 June from S$124.1 million at year-end, building into a market that was buying less. The oversupply signal sits in finished goods, which rose to S$120.2 million; work-in-progress also climbed, to S$7.5 million from S$0.8 million, indicating the Kluang lines kept producing even as sell-through slowed. The group booked a further S$2.3 million allowance for inventory impairment during the half, up from S$0.5 million a year earlier, lifting the cumulative allowance balance to S$23.2 million, about 15% of gross inventory (S$23.2 million against S$155.6 million gross, before the allowance). The initiation flagged the S$124 million inventory book (266 days of turnover) as a specific impairment risk. This half is the first evidence of that risk crystallising, in small but rising increments.

The third is the dividend. The interim payout was cut to 1.00 cent from 1.25 cents, entirely through halving the special interim component from 0.50 to 0.25 cent. The ordinary interim of 0.75 cent was held. Management framed nothing around this, and the results carried no prospect statement at all, but the signal is legible on its own: the board chose to conserve about S$1.1 million of cash rather than defend a headline first-half figure. For a stock whose appeal to income buyers rested partly on an unbroken, growing dividend record, it is a meaningful gesture even if the ordinary portion is intact.

Not everything moved the wrong way. Finance costs fell 17.8% to S$4.6 million, with interest on borrowings down 19.1% to S$4.2 million, as lower rates and the FY2025 deleveraging fed through; annualised, finance costs are now tracking below the S$10.7 million FY2025 full-year figure. The overseas equity-accounted businesses improved: the Vietnam associate (Viet Ceramics) contributed S$0.3 million of profit share, up from S$0.1 million, and paid the group an S$0.9 million cash dividend during the half; the Myanmar joint venture contributed S$0.7 million, up from S$0.3 million. A translation gain of S$1.5 million (against a S$2.0 million loss last year) meant total comprehensive income actually edged up 2.4% to S$12.1 million despite the fall in reported profit.

Thesis check

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Underneath a nearly flat top line sat the exact rotation we described when we initiated on this name in May [3].

Commission income from agency services (resale, HDB, leasing) rose 6.9% to S$360.5 million, while commission income from project marketing, the new-launch business, fell 7.8% to S$238.4 million against a thinner launch calendar [1]. One engine slowed; the others sped up enough to keep the group level. Market share by transaction volume rose to 64.3% for the half, from 60.6% for the 2025 financial year, and it rose in every single segment PropNex reports [1].

Where the thesis stood

We published our initiation on 20 May 2026, using the 19 May close of S$1.83, then roughly 30% below the October 2025 high.

Our central call was that the market was pattern-matching “new launches down, so PropNex down” without doing the segment arithmetic. Project marketing was only about 39% of revenue; the other 61% was driven by volumes management guided as flat to growing. We flagged a 60/30/10 split between our base, bear and upside cases, called it a positive-expected-value position rather than a high-conviction one, and named the single most dangerous risk explicitly: a fresh government cooling measure aimed at the HDB upgrader chain [3].

The half in numbers

Two lines carry the story.

The first is the split within revenue. Project marketing commission fell S$20.1 million year on year; agency commission rose S$23.3 million [1]. The offset was not merely present, it was slightly larger than the drag, which is why revenue edged up rather than down. This is the segment-mix resilience our initiation rested on, showing up in the accounts on schedule.

The second line is gross profit, down 3.5% to S$63.9 million, which fell faster than revenue [1]. Gross margin slipped to 10.6% from 11.0% as the cost of services rose faster than revenue, and segment profit margins compressed [2]. We would not read this as a mix effect: project marketing in fact carries a lower segment profit margin than agency services, so this half’s shift toward agency should, if anything, have helped. It is a modest compression, not a rupture, but it is real and it is the one number in this release that does not flatter the bull case.

On the balance sheet, cash and cash equivalents stood at S$130.2 million at 30 June 2026, down from S$149.1 million at the start of the year, with a further S$31.0 million held in other investments and no bank borrowings [2]. The S$18.9 million cash decline over the half came after a S$33.2 million operating cash inflow, S$33.3 million of dividends to owners and S$1.4 million to minorities, and about S$18.0 million redeployed into long-term deposits and other investments [2]. This is a company returning nearly all of its profit and still sitting on net cash, carrying only about S$3.7 million of lease liabilities and no bank debt.

The salesforce, the asset the whole franchise rests on, grew to 14,574 licensed salespersons as at 3 August 2026, up from 13,945 at the start of the year [1]. PropNex added roughly 630 net agents through a period in which a competitor was publicly recruiting against it.

Below for paid subscribers: our judgment and the valuation - the point-by-point thesis check, the PropNex-vs-ERA scorecard, the policy read, the risk section, and the price.

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Revenue was broadly flat at S$292.2 million, gross profit rose 1.5% to S$62.1 million, and operating profit before tax, which strips out the volatile treasury and grant income, rose 10.0% on a constant-currency basis to S$20.2 million on a 1.9% cut in operating costs. The entire drop in reported profit came from other income, which fell 65.5% to S$5.4 million on lower grants, interest income and an adverse fair-value swing. The board raised the interim dividend 10% to 2.2 cents.

The more consequential news was strategic. In the 14 August release, management set out three “public market initiatives,” the first time it has framed capital allocation around minority shareholders rather than balance-sheet preservation.

Prior Thesis Recap

Our 7 July 2026 initiation called HRnetGroup an income-and-execution holding, not a rerating candidate.

The central observation was that FY2025’s reported profit ran well ahead of the operating business: strip out treasury income and one-off grants and the group earned roughly S$38 million, not the S$51.2 million headline. We valued the operating business at about 12 times normalised earnings plus a haircut treasury, and concluded the market was pricing the stock close to its steady-state value. Two flip triggers framed the two-sided case.

The bull flip: Singapore gross profit stabilises, removing the structural-decline discount. The bear-to-bull catalyst we thought least likely: a family capital event, a special dividend, a real buyback or a widening float, that releases the trapped cash, since SIMCO’s 79.177% control meant a minority could not summon it. Our dated forecast was that FY2026 group gross profit would be roughly flat to modestly up while reported profit fell below FY2025.

New Financial Data

The composition inverts the story we told at initiation. In FY2025 reported profit rose while the operating business was flat, lifted by items below the gross-profit line. This half did the reverse. The entire fall in reported profit traces to a S$10.3 million drop in other income, a line that sits below gross profit and reflects nothing about how the recruitment business traded.

Three items account for S$9.8 million of that drop.

The largest, S$4.4 million, was an adverse swing in fair-value marks, which turned from a S$2.9 million gain a year ago into a S$1.5 million loss.

The second, S$4.1 million, was lower Progressive Wage Credit Scheme support, mostly the non-recurrence of a S$3.0 million deferred grant received in 2025.

The third, S$1.3 million, was lower interest income.

Underneath, the operating business strengthened. Flexible staffing grew gross profit 3.7% to S$33.0 million, with average monthly contractors up 6.9% to 17,253 and segment margin widening to 12.6% from 12.0%. Professional recruitment held gross profit stable at S$27.6 million on 2,311 placements. Management calls the contractor rise flexible staffing’s “first post-COVID volume U-turn.”

The geographic mix is the surprise. The four-year Singapore decline that anchored our bear case paused:

The rest of this update is for Paid Subscribers: our thesis check against each initiation call, the Singapore turn and whether it flips our structural-decline bear case, the capital-return reframing we treat as the centre of gravity of this update, the risks revisited, what to watch into the February 2027 result, and the bottom line.

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Then the same statement reported that profit from core business operations attributable to equity holders fell 16%, from S$57.8 million to S$48.8 million. Reported earnings per share fell 64%, from 8.79 cents to 3.15 cents. Net asset value per share fell from S$1.47 to S$1.40.

The market read the headline. OU8 closed at S$1.70 on 12 August and S$1.60 on 13 August, a 5.9% fall on the print, recovering to S$1.62 by 14 August and closing at S$1.60 on 21 August [14].

There are two separate declines here and they have different causes, which is worth establishing before anything else.

1. The fall in reported profit and earnings per share is explained by the fair-value loss on investment properties and the swing in associate accounting, both of which the company’s core measure deliberately strips out.

2. The fall in core attributable profit is explained by something else entirely, and by only one thing: the non-controlling interest share of core profit.

In the same fortnight, two other things happened that the earnings headline buried:

1. Centurion Accommodation REIT reported its first half-year as a listed trust and beat its IPO forecast distribution per unit by 9.6%.

2. On 4 August, Centurion won a Building and Construction Authority tender for a 7,000-bed dormitory site at Kranji Close for S$343.0 million, a commitment larger than any single land purchase disclosed in the filings we hold.

Where the thesis stood

Our initiation of 25 May 2026 [15] argued that the September 2025 CAREIT listing had converted Centurion from a dormitory operator into a three-pillar platform, that the consolidated accounts obscured rather than revealed this, and that the market was still applying operator multiples to a business that had become an operator, an asset manager, and a REIT unitholder.

We warned specifically that consolidation would make the reported headline diverge from the underlying economics. We described the FY2026 revenue line as set to jump for accounting reasons that would not translate cleanly into attributable earnings. What we did not do was size the effect on the attributable line. That omission is the reason this print landed harder than our framing prepared readers for, and we address it directly below.

The numbers

Revenue growth came from three places.

1. Westlite Mandai, consolidated since 25 September 2025, contributed S$22.9 million of the S$30.6 million increase in Singapore worker accommodation revenue.

2. New beds at Westlite Toh Guan added S$4.5 million.

3. EPIISOD Macquarie Park, operational from January 2026, added S$7.2 million and doubled Australian student accommodation revenue to S$16.5 million.

Occupancy moved the other way. Singapore worker accommodation financial occupancy fell from 99% to 94% on the ramp-up of newly completed beds at Toh Guan and Mandai; committed occupancy at Westlite Toh Guan and Westlite Mandai as at 31 July was disclosed at 99% and 87% respectively [1], which supports the ramp explanation rather than a demand explanation. Malaysian occupancy fell from 83% to 73% on foreign worker quota caps.

Thesis check

The accounting-versus-economics point: validated, and larger than we said

We wrote in May that the consolidation “does not translate cleanly to attributable earnings.” That was correct in direction and inadequate in magnitude. It is worth separating the two declines cleanly, because they are often run together and they carry different meanings.

The entire core decline is the minority share. Core profit is the company’s own measure, and it already strips out fair-value movements. So the gap between core profit for the whole group and core profit for shareholders is, by definition, the slice that belongs to outside investors, chiefly the other CAREIT unitholders. That slice went from S$7.6 million in 1H 2025 to S$38.9 million in 1H 2026.

It grew fivefold for two reasons: timing and ownership.

CAREIT only listed in late September 2025, so it was absent from the 1H 2025 comparison as a listed REIT. By the first half of 2026 it was a full six months in the accounts, and Centurion owns only about 38% of it, so roughly 62% of CAREIT’s profit belongs to other unitholders. Because CAREIT holds a large share of the group’s best, stabilised assets, a big part of group profit now flows to those outsiders before it reaches Centurion shareholders. That is why group core profit could rise 34% while the shareholders’ share fell 16%: the company earned more, but a bigger portion of it was owned by someone else.

The reported decline is fair value and an accounting reclassification. The reported number, which unlike core still includes revaluations, fell from S$73.9 million to S$26.5 million, and earnings per share from 8.79 cents to 3.15 cents. Two things caused it, and neither is worse trading. The first is a fair-value loss on investment properties, which widened to S$32.8 million this half from S$3.5 million a year ago, S$19.4 million of it in student accommodation; we return below to what actually drove that loss.

The second is the reclassification of Westlite Mandai. An associate is a company Centurion owns part of but does not control, and its share of that company's profit sits on a single line, "share of associates." A year ago Mandai was an associate, and that line carried S$28.4 million from it, of which S$22.7 million was a one-off gain from revaluing Mandai's property upward rather than recurring earnings. Centurion has since taken full control, so Mandai is now a subsidiary, and its revenue and profit are consolidated into the main lines instead. The associate line therefore lost the large Mandai figure it held last year and swung from a S$27.8 million profit to a S$4.2 million loss, not because anything deteriorated but because Mandai moved elsewhere in the accounts and last year's figure was flattered by a one-off gain.

Neither decline is an operating deterioration, but the core decline is real in the sense that a shareholder's claim on this year's core profit is genuinely smaller than last year's. The question is whether that reduction is permanent.

Is the shareholder’s share leaking? No, and it runs the other way

This was the question we could not answer from the results statement alone, so we went to the two filings that settle it.

On 2 June 2026, Centurion completed the Dividend in Specie it had proposed in February. A dividend in specie is one paid to shareholders in assets rather than cash, "in specie" being the term for payment in kind: here, Centurion handed out CAREIT units it held rather than selling them and paying cash. It distributed 84,077,200 CAREIT units to shareholders on a one-unit-per-ten-shares basis, a cash-equivalent S$0.11 per Centurion share at the S$1.10 unit price. Its holding fell from 42.9% to 657,873,900 units, or 38.1% of the trust [4].

That is a reduction in Centurion's stake in CAREIT. It is not a reduction in value for Centurion's shareholders, because they received the CAREIT units directly into their own accounts. The economic interest moved from one side of the shareholder's portfolio to the other.

The second filing is the more interesting one, and it runs the other way. As manager of CAREIT, Centurion Asset Management, a wholly-owned Centurion subsidiary, earns a base fee for running the trust, and it can take that fee in cash or in new CAREIT units. For the first quarter it elected to take 100% in units: on 20 May 2026 CAREIT issued 2,529,442 new units at S$1.1396 to settle the fee [5]. The manager then assigned the entitlement to Centurion Capital Investments Ltd, so the units were issued there rather than to the manager itself. Centurion Capital Investments is a wholly-owned subsidiary of Centurion Overseas Investments, which is wholly owned by Centurion Corporation, so the units stay inside the Centurion group.

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This is the sponsor being paid its management fee in more of the REIT, and the effect compounds. Each issuance accrues entirely to Centurion, which held only about 38% beforehand, so its percentage stake rises every time the fee is settled this way. And as CAREIT grows its assets and distributable income, the base fee itself grows, so each subsequent issuance is larger. It is the opposite of the dilution a sponsor’s stake usually suffers:

The Dividend in Specie was a single step down. The fee-in-units mechanism is a continuous step up: every unit issued or to be issued for the half-year was for manager fees, and on the election the manager has made so far, those units land with Centurion. Manager fees are now running at roughly S$14.8 million a year on the first-half figures, and while the manager elects to take them in units, that fee stream converts directly into a larger stake.

So the answer to the question is that the non-controlling interest drag is a one-time reset to a lower base, not a widening leak.

The REIT leg of our bull case has fired. The operating leg has not

Our initiation named a specific activation trigger for the bull scenario. We reproduce it here because it can now be scored:

“CAREIT 1H 2026 results print (likely August 2026) showing DPU run-rate of ≥3.4 cents (annualised ≥6.8 cents, above the 6.67 prospectus projection); plus Centurion 1H 2026 results print showing PBWA Singapore occupancy stabilising above 95% and Malaysian occupancy recovering to >75%.”

CAREIT reported a first-half distribution per unit of 3.499 cents against a prospectus forecast of 3.192 cents, a 9.6% beat, annualising to roughly 7.0 cents. Gross revenue beat forecast by 5.1% and net property income by 4.3%. Aggregate leverage is 29.9%, interest coverage 5.91 times, weighted-average interest cost 3.60% [3].

That leg fired.

Singapore occupancy came in at 94% against the 95% we specified. Malaysian occupancy came in at 73% against 75%. Both missed, narrowly. The Singapore miss looks like timing given the committed-occupancy disclosure. The Malaysian miss is a policy constraint that management expects to ease as quota applications reopen for selected industries.

The honest score is a half-fired trigger. The REIT and fee side is running ahead of plan; the operating side, the dormitories themselves, is behind on a lag.

The moat: validated, and more contested than we implied

On 4 August, the Building and Construction Authority awarded Centurion the Kranji Close site for S$343.0 million [6]. It is 22,079 square metres at a plot ratio of 3.0, on a 30-year lease from November 2026, for 7,000 New Dormitory Standards-compliant beds, with completion targeted for the second quarter of 2028 and operational readiness in the third [7]. Centurion will develop it through a 90:10 joint venture with an unnamed minority partner.

Our initiation argued that compliance is expensive, that roughly 900 dormitories housing 200,000 workers must retrofit by 2030, and that the operators who can fund compliance would take share. Winning a 7,000-bed compliant site is that argument made concrete.

What the tender documents also show is how contested that advantage is. The Kranji tender drew ten bids. Centurion is separately the top bidder for a second site at Lok Yang Way, a 5,000-bed plot [9] where the tender closed on 23 June and which the Jurong Town Corporation publishes in full [8]:

Centurion’s Kranji bid works out at S$49,000 per approved bed. Its own Lok Yang Way bid is S$44,333 per bed, and the Kranji site is 80% denser in beds per square metre of land, which accounts for much of the difference.

The useful comparison is not against the carrying value of the existing portfolio, which reflects assets bought years ago on leases now part-expired. It is against the other nine bidders. On that basis Centurion sits at the top of a tightly clustered band, winning Lok Yang Way by 1.22% over Banyan Capital and by 16% over the median.

That tells us something the initiation did not say. The regulatory advantage is real, but it is not proprietary. Ten well-capitalised parties, including established contractors, can all see the same opportunity and price it within a narrow range. Centurion’s edge is the willingness and the balance sheet to clear the top of that range repeatedly, not an insight the market lacks.

Management frames the supply backdrop as tightening rather than loosening. According to The Edge’s report of the results briefing, the chief operating officer of the accommodation business said the roughly 40,000 beds due to enter the market this year and early next are largely replacements for temporary dormitories whose land leases will not be renewed, and that the Dormitory Transition Scheme’s interim space standards will cut current operating supply by about 15% [16]. This is the operator’s own characterisation, reported second-hand and self-serving, but it is consistent with the compliance-driven attrition our initiation described.

A correction: the Australian pipeline is not Centurion’s in the way we described

Our initiation listed the Australian development pipeline under Growth Driver 4 as “Australian PBSA developments (Centurion-direct, separate from CAREIT-held)” and counted “approximately 1,791 beds” of additions. We described the Stirling Highway project in Perth as part of “Centurion’s directly-held Australian pipeline.”

That was wrong, and the company’s own disclosure is clearer than our reading of it. The correction matters enough to state precisely:

Of the 1,791 beds we presented as directly held, 472 are held through a vehicle in which Centurion owns a quarter. On an economic basis the pipeline is 1,437 beds. The Stirling Highway subscription was announced on 1 December 2025 and headed as an interested person transaction. We published on 25 May 2026. The filing was available to us for nearly six months and we did not read it against the growth-driver claim we were making.

Centurion holds 25% of the Perth developments. The other 75% is held by Centurion Properties Australia Investments, a wholly-owned subsidiary of Centurion Properties, which is wholly owned by Centurion Global Ltd. Centurion Global is owned in equal shares by Han Seng Juan and Loh Kim Kang David, the joint chairmen and controlling shareholders. Each subscription has been announced as an interested person transaction under Chapter 9 of the Listing Manual [10][11][12].

The terms are proportionate and on the record. Shareholder loans are advanced in proportion to shareholding, the corporate guarantee on the Fairway facility is exactly 25% of the loan, and the Audit Committee has reviewed each transaction as on normal commercial terms and not prejudicial to minority shareholders. Each is an announced interested person transaction, and the results presentation labels both Perth assets as "25% stake."

What matters analytically is what the structure does to a growth claim. Centurion supplies the brand, the operating platform and proportionate credit support.

When a development stabilises, the exit is a sale into CAREIT. That is exactly what happened with EPIISOD Macquarie Park: Lachlan Avenue Development owned the 732-bed Macquarie Park site, and CAREIT completed the acquisition in January 2026.

Centurion’s own first-half accounts confirm the route, attributing part of the associate loss to “the share of finance costs of the associated company from the prepayment of loan due to the sale of Macquarie Park to CAREIT.”

So the Sydney asset was owned three-quarters by the controlling shareholders and one-quarter by Centurion, and Centurion's REIT, in which Centurion now holds 38.25%, provided the exit. We are not able to say what development margin was realised or how it was split: the forward purchase price was agreed at the time of the CAREIT listing, the vehicle's cost base is not disclosed, and Centurion's associate line for the half shows a loss on the prepayment of the related loan. What we can say is who owned the asset on the way in. The transaction was disclosed, the CAREIT prospectus flagged Macquarie Park among properties "sold either wholly or in part by third party vendors," and two independent valuers appraised it.

We are correcting our own framing, and the 25/75 split matters less than it first sounds: it applies only to Sydney and Perth, the smaller projects, while Melbourne, which dominates the pipeline, is wholly owned. On a bed-weighted basis Centurion's economic interest in the current Australian pipeline is therefore roughly three-quarters, not a quarter:

So the correct statement is narrower than “the pipeline belongs to the family.” It is that two of the four current projects, and the Sydney project before it was sold, are three-quarters owned by the controlling shareholders, and that our May article described one of them as directly held when it is not. A reader building a bed-count model of Australian growth should discount Perth by 75% and leave Melbourne alone. According to The Edge, the REIT manager gave the same split from the trust’s side at its 6 August briefing: the Macquarie Park master tenant, Herring Road Management Pty Ltd, is 25% owned by Centurion Corporation and 75% by Centurion Properties [16], which matches the ownership we set out in Figure 4.

Two details from the Fairway announcement are worth recording, and they cut in opposite directions.

The first is that Centurion’s A$250,000 was a subscription for new shares, not a purchase from the family vehicle: issued capital rises to A$772,011 on completion, so the cash went into the development company rather than to CPAI. Nobody cashed out.

The second is that the announcement states “no independent valuation was conducted on FDA by COI(II).” Centurion relied on a valuation FDA itself commissioned in April 2026, which put the site at A$6.7 million against a book value of A$7.13 million. At a 25% interest the difference is worth about A$108,000, which is immaterial to a group with S$2.2 billion of net assets. We note it because our published Risk 6 said to watch how related-party terms are set, not because the amount matters.

The new question: what it costs to keep winning

The rest of this update, what the land actually costs Centurion to keep winning, the rebuilt look-through valuation, the scorecard against every trigger we published in May, and where the thesis stands now, is for paid subscribers.

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The profit decline came mostly from lower dividend income from strategic investments, down 27.7% to S$75.2 million from S$104.1 million in H1 2025, with a smaller drag from lower interest income. The dividend cause sits one level up the ownership chain, and it is more a special-dividend story than an ordinary-payout cut.

The UOB dividend Haw Par banked in the first half fell to S$0.71 per share (UOB’s FY2025 final) from S$1.17 in the year-ago period. That S$1.17 was not an ordinary payout: it comprised UOB’s FY2024 final of S$0.92 plus a S$0.25 tranche of UOB’s 90th-anniversary special dividend. [2] Stripped of the one-off, UOB’s ordinary final eased only from S$0.92 to S$0.71, and the rest of the year-on-year drop was simply the non-recurrence of the special.

With Haw Par holding roughly 74.8 million UOB shares, that S$0.46 per-share reduction cut UOB dividend income by about S$34 million, most of the S$36 million fall in net profit. Group dividend income fell a smaller S$28.8 million, as higher dividends from UOL and other holdings offset part of the UOB drop.

Healthcare segment revenue retreated 9.0% to S$106.3 million (from S$116.8 million), which management attributed to softer consumer sentiment affected by inflationary pressures from higher energy prices, ongoing trade policy uncertainties, and a higher comparative base from advanced orders in the first half of 2025. [1]

Here is the part worth pausing on, and the thread this update pulls: at S$15.06, the market values the entire company below the quoted worth of its UOB and UOL shares alone, before any credit for its cash, Tiger Balm, or its properties.

Healthcare segment revenue retreated 9.0% to S$106.3 million (from S$116.8 million), which management attributed to softer consumer sentiment affected by inflationary pressures from higher energy prices, ongoing trade policy uncertainties, and a higher comparative base from advanced orders in the first half of 2025. [1]

Here is the part worth pausing on, and the thread this update pulls: at S$15.06, the market values the entire company below the quoted worth of its UOB and UOL shares alone, before any credit for its cash, Tiger Balm, or its properties.

Prior Thesis Recap

Our initiation piece, published 4 April 2026, framed Haw Par as a company whose real value had nothing to do with muscle rubs. [4]

The central observation was structural: Tiger Balm is the brand people know, but the S$3.4 billion investment portfolio (primarily 74.8 million UOB shares and 72 million UOL shares) was the dominant value driver, contributing three times the healthcare business’s profit through dividend income alone.

The thesis rested on three legs:

• the healthcare business as a cash-generative consumer franchise with pricing power,

• the investment portfolio as a growing dividend machine anchored by UOB’s rising payouts, and

• a persistent discount to net asset value that the FY2024 special dividend (S$1.00 per share, paid alongside FY2024’s 20-cent final in H1 2025, bringing that year’s total payout to S$1.40) suggested management was beginning to address.

The implicit flip trigger on the income side was a reversal in UOB’s dividend trajectory. The prior article noted that net profit had compounded at ~8.7% annually, “driven almost entirely by rising dividend payouts from UOB.”

Where the initiation's calls stand. The dividend picture to anchor on: the S$1.00 special was declared with FY2024's results and paid in H1 2025 alongside the FY2024 20-cent final (Note 8); the regular annual payout is 40 cents (20c interim + 20c final).

Against that baseline, the initiation's calls have played out unevenly.

The NAV-accretion thesis was correct: the portfolio and NAV both rose double digits.

The income thesis, that profit would keep compounding on UOB's rising payouts, was wrong, or at best too early, since UOB's payout reset lower within a single period and drove a 25% profit decline.

And the downside scenario we explicitly named, a 40-cent payout with the yield near ~2.4%, is now the live case, with H02 yielding roughly 2.7% on 40 cents at S$15.06.

Financial Snapshot Update

The half’s income statement carries the full weight of the dividend story.

Revenue slipped 8.2% and gross profit 9.6%, but the real mover was other income, down 29.9% as dividend and interest income fell together. That is what pulled pre-tax profit down 24.2% and net profit down 25.2%.

The balance sheet moved the other way.

Fair-value gains on the strategic portfolio lifted net assets over the six months, taking NAV per share up 10.6% to S$21.43 even as reported profit fell. The cash position stayed a fortress: the group rotated S$169 million out of bank deposits into Singapore Treasury bills, yet the combined cash-and-securities pile still grew to S$881 million against just S$53 million of borrowings.

Underneath the group totals, the two engines diverged. Healthcare absorbed the revenue decline while holding most of its profit, and the investment segment, though lower year-on-year on the softer dividend, still earned more than twice the healthcare business.

Thesis Check

Bull thesis (UOB dividend income as a passive, growing stream): Income intact, growth premise overstated.

This was the core value-driver claim in the initiation: Haw Par’s investment segment generated S$205 million in FY2025 profit, “three times the healthcare business,” primarily through S$189 million in dividend income. The thesis implicitly assumed that UOB’s dividend trajectory would continue upward; the prior article traced UOB dividends to Haw Par growing from an estimated ~S$67 million (2016) to ~S$135 million (FY2025).

H1 2026 dents that trajectory, but less than the headline suggests. Dividend income dropped to S$75.2 million from S$104.1 million, and most of that is a special-dividend effect, not an ordinary cut. UOB’s FY2025 ordinary dividend was S$1.56 per share (S$0.85 interim + S$0.71 final); Haw Par’s H1 receipt reflects that lower S$0.71 final against a year-ago S$1.17 that had bundled UOB’s FY2024 final with a S$0.25 tranche of its 90th-anniversary special. [2] The ordinary line is intact: UOB has since declared an FY2026 interim of S$0.88 per share (payable 28 August 2026), up from S$0.85 a year earlier, alongside 1H2026 net profit growth of about 3%. [5]

So the income “reset” is really the fading of UOB’s anniversary specials plus a modestly lower final, not evidence that the underlying stream is shrinking. Haw Par still banked S$75.2 million in six months from an effectively passive holding. The ordinary interim improved from S$0.85 to S$0.88, but total H2 2026 UOB cash received will still land below H2 2025, because last year’s S$1.10 half-year receipt included a S$0.25 special tranche on top of the S$0.85 ordinary. The point is the shape of the H2 shortfall: it is entirely the vanished special, while the ordinary interim is edging up. The honest revision to the initiation is narrower than “the machine is breaking.” The ordinary dividend stream is stable-to-rising, but the elevated 2025 cash, inflated by anniversary specials, was never the run-rate, so full-year 2026 dividend income will sit below 2025’s special-boosted level even as the ordinary trend holds.

Bull thesis (Tiger Balm’s consumer franchise with pricing power): Pricing power intact, Asian demand weakening.

Healthcare segment revenue fell 9.0%, but the group gross margin held at 55.7% (vs 56.5%). The margin dip was marginal and attributed to product sales mix shifts, not pricing erosion. [1] Segment profit declined to S$32.2 million from S$34.4 million, a 6.6% drop on a 9.0% revenue decline, which means the cost base flexed. At the group level, distribution and marketing expenses fell 22.7%, suggesting management pulled back on promotional spend rather than chasing volume at deteriorating returns. [1]

Pricing power holds at the gross-margin line, but the demand trend is weaker than a single soft half suggests, and we are less sanguine than at initiation.

Healthcare revenue fell about 7% in FY2025, and because H1 2025 was inflated by advanced orders, the underlying second half was materially softer; H1 2026's further 9% decline extends that run. [6] The weakness is regional, not universal: FY2025 sales in the Americas, Europe and the Middle East grew about 6%, while ASEAN fell 9% and the rest of Asia 15%. [6]

Tiger Balm is really two stories: it is growing in the West but losing ground in Asia, where competitive undercutting and soft sentiment are eroding volume. That is a real demand problem, not simply a brand riding out a one-off comparative.

Bull thesis (NAV accretion / asset discount): Validated; capital-return catalyst still unproven.

NAV per share rose 10.6% to S$21.43, driven by S$388.6 million in fair value gains on strategic investments flowing through other comprehensive income. [1] At S$15.06, Haw Par trades at about 70% of NAV, a 29.7% discount.

But the sharper way to frame the mispricing is this: at S$15.06 the whole company is capitalised at about S$3.33 billion, while its two listed stakes alone, UOB (S$2,975.3 million) and UOL (S$685.9 million), are worth S$3.66 billion.

The market is paying less for all of Haw Par than the quoted value of its bank and property-developer holdings, implying little to no value for the S$829 million of net cash and treasury bills, the Tiger Balm franchise, and the investment properties.

This is not costless free money, and the discount can persist indefinitely: the Wee-family control structure removes any takeover pressure, the stock is thinly traded, there is no buyback, and management has signalled no path to monetising the stakes. What the SOTP establishes is a floor, not a catalyst; the price is anchored to assets that are themselves liquid and marked to market daily.

On the payout, the ordinary dividend is steadier than the initiation implied. Haw Par has paid a 20-cent interim since FY2023, and it maintained that 20 cents here despite the earnings drop, so the 40-cent ordinary annual payout held from FY2023 through FY2025, and the FY2026 interim keeps Haw Par on that path. The genuine outlier was the FY2024 S$1.00 special (paid in H1 2025); FY2025 reverted to 40 cents, and this interim gives no signal on whether a special will accompany the FY2026 full-year results.

Bear thesis (passive conglomerate structure, no catalyst for discount closure): Unchanged.

Nothing in this filing addresses the structural discount. There is no share buyback activity, no corporate restructuring signal, and no change to the conglomerate holding structure.

The investment portfolio continues to appreciate (UOB +13.4%, UOL +9.3% in six months), widening the absolute NAV gap even as the proportional discount fluctuates. The fortress balance sheet, S$881 million in cash and short-term debt securities against S$52.6 million in borrowings, remains under-leveraged by any measure.

Flip-trigger status. Three events would force us to revise the call, and none tripped this period.

1. A UOB dividend cut in two consecutive years or a credit-quality deterioration (a sharp rise in non-performing loans): not triggered — UOB’s ordinary interim rose to S$0.88, 1H2026 net profit grew about 3%, and no asset-quality stress was flagged, so the lower FY2025 final is not yet a sustained ordinary cut. [5]

2. A Haw Par sale, demerger, or monetisation of Tiger Balm or the investment portfolio, which would be a positive catalyst: no such signal, and no buyback.

3. A regulatory change to banking-holding-company rules that forced a reduction in the UOB stake: no development this period.

The thesis stands unchanged against all three breakers.

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Answering the Questions We Opened in April

Our initiation left four questions explicitly open, and named four downside scenarios. Here is where H1 2026 leaves each.

Will the S$1.00 special dividend recur? On the evidence, no. It was a one-time FY2024 event; the regular payout is 40 cents (20c interim + 20c final). Specials, if declared at all, come with full-year results, so this interim offers no fresh signal. But the burden of proof has flipped: a repeat special is now the exception that would need explaining, not an emerging norm.

How would dividend policy evolve? The floor held: the 20-cent interim was maintained despite a 25% earnings drop, confirming the step-up from the old 15-cent interim is durable. But the growth our initiation extrapolated did not appear. The income line is now visibly hostage to UOB’s board, not Haw Par’s.

Is Tiger Balm gaining Western-market traction? Unanswerable from this filing; the interim carries no geographic split. Healthcare segment revenue fell 9.0%, which management ties to demand softness and a high comparative base rather than a retreat in the international push. It stays genuinely open, to be revisited at the FY2026 full-year, when the geographic breakdown returns.

Any restructuring signal from the Wee-family / UOI structure? None in this filing. No buyback, no structural change, no distribution of the Haw Par stake. The discount-closure catalyst the initiation was watching for remains absent.

Of the four downside scenarios we flagged, the income-volatility risk has moved from theoretical to demonstrated, though H1 showed it as special-dividend normalisation rather than a cut to the ordinary stream. The concentration risk, UOB as the dominant swing factor in both value and income, is no longer abstract. It produced this period’s headline.

Risks Revisited

The primary risk flagged in the initiation, dependence on UOB’s dividend policy, became visible this period, but H1 flattered the bear case. Most of the income drop was the non-recurrence of UOB’s anniversary specials plus a lower ordinary final, not a structural cut; UOB’s higher FY2026 interim confirms the ordinary stream is intact. [5] The real, unchanged risk is the shape of the dependence: a genuine shift in UOB’s capital-allocation priorities (higher CET1 buffers, buybacks over cash dividends) would compress Haw Par’s reported earnings with no offsetting operational lever. That has not happened, but this period is a reminder of how directly it would flow through.

A second risk worth noting: the healthcare revenue decline coincides with management’s commentary on “persistent inflation from prolonged geopolitical conflicts” and “trade policy uncertainties.” [1] The “both engines soft at once” scenario has eased on the income side, since UOB’s ordinary FY2026 interim came in above the prior year, leaving the healthcare trajectory as the swing factor for H2 2026.

Interest income also halved (S$6.0m vs S$12.2m), reflecting the declining rate environment. The shift of S$169 million from cash into Singapore Government Treasury Bills (debt securities rose from S$43.3m to S$212.3m) is a partial offset, with management actively locking in yields. [1]

What to Watch

Three forward indicators will determine whether this is a cyclical soft patch or a structural downshift:

First, and now answered, UOB’s FY2026 interim dividend. UOB has declared S$0.88 per share, payable 28 August 2026, up from the S$0.85 ordinary interim a year earlier, with 1H2026 net profit up about 3%. [5] That payment lands in Haw Par’s second half and confirms the H1 income drag was a timing-and-specials effect rather than a structural cut. What remains open is UOB’s FY2026 final (declared February 2027): the FY2025 final of S$0.71 was the figure that hurt Haw Par’s first half, so whether the next final rebuilds or holds near S$0.71 will set the direction of Haw Par’s 2027 income.

Second, Haw Par’s H2 2026 healthcare revenue trajectory. Management flagged the H1 2025 comparative base as elevated by advanced orders. If H2 2026 revenue recovers toward S$115–120 million (closer to FY2025’s S$210 million annualized run rate), the healthcare softness was base-effect, not demand erosion.

Third, the FY2026 full-year dividend decision (expected February 2027). FY2024’s total payout was S$1.40 (20c interim + 20c final + S$1.00 special); FY2025 reverted to 40 cents (20c + 20c, no special). If FY2026 delivers at least 40 cents total (20c interim already declared + 20c final), the 40-cent floor is confirmed. Any special dividend on top would signal the elevated payout is more than a one-off.

Bottom Line

Haw Par’s H1 2026 is a split-screen result. The income statement shows profit 25% below a year ago, but the cause is narrower than it looks.

The year-ago half was inflated by UOB’s 90th-anniversary special dividends; strip those out and the ordinary dividend stream is intact and, on UOB’s just-declared S$0.88 FY2026 interim, still edging up. The balance sheet tells the louder story: net assets grew S$452 million in six months to S$4.74 billion, the strategic portfolio’s carrying value rose S$409 million (S$388.6 million of it fair-value gains), and the company still sits on S$881 million of cash and treasury bills against just S$53 million of borrowings.

The thesis from April stands, with one refinement. The investment income is not a straight-line “rising machine,” since its year-to-year cash can swing on UOB’s special dividends, but the ordinary stream is stable and slowly rising, and the H1 drop overstated the underlying trend.

What has not changed is the structural mispricing: at S$15.06 the market values all of Haw Par below the quoted worth of its UOB and UOL stakes alone (S$3.66 billion), implying little to no value for the S$829 million of net cash and treasury bills, the Tiger Balm franchise, and the properties. The portfolio’s market value has continued to appreciate (UOB up 13.4% in six months), healthcare still earns 55%-plus gross margins, and the discount to NAV, 29.7% at S$15.06 against NAV of S$21.43, remains wide.

The interim dividend of 20 cents, maintained despite the earnings decline, suggests management intends to hold the 40-cent ordinary floor that has been in place since FY2023. Whether a special dividend is repeated for FY2026 depends on how UOB’s own capital return evolves.

For now, Haw Par remains what it was at initiation: a deep-value holding where the passage of time, UOB dividends, and portfolio appreciation do the work.

Data Integrity Notes

• Share price of S$15.06 is based on Google Finance market data as of the 21 August 2026 close.

• UOB dividend per share history (2024–2026) sourced from Stock Analysis (stockanalysis.com), cross-checked against the dividend income decline reported in Haw Par’s filing. The April 2026 UOB DPS of S$0.71 is consistent with Haw Par receiving ~S$53 million in UOB dividends, which aligns with the S$75.2 million total dividend income (with UOL and other sources contributing the remainder).

• The filing has not been audited or reviewed (per Note 15 of the filing). [1]

• Haw Par’s UOB shareholding (~74.8 million shares) is carried forward from the initiation article based on FY2025 annual report data. The H1 filing does not disclose the exact number of UOB shares held, only their fair value (S$2,975.3 million). At UOB’s 30 June 2026 closing price, this is consistent with the ~74.8 million figure.

• UOL shareholding (~72 million shares) is similarly carried forward. The UOL stake at S$685.9 million fair value is consistent with ~72 million shares at UOL’s 30 June price.

• No forecast or prospect statement was previously disclosed for H1 2026. [1]

• Dividend-year attribution: our April initiation labelled the S$1.00 special as an FY2025 dividend. This update follows the company’s own Note 8 attribution: the special was declared with FY2024 results and paid in H1 2025; FY2025’s attributable payout was 40 cents. The S$1.40 “FY2025” figure in the initiation reflects cash paid during calendar 2025 rather than FY2025’s financial-year distribution. [1]

• UOB dividend basis: UOB per-share dividends here separate ordinary from special components. UOB’s FY2025 ordinary dividend was S$1.56 (S$0.85 interim + S$0.71 final); the S$0.25 tranches paid during 2025 were part of a S$0.50 90th-anniversary special. The FY2026 interim of S$0.88 (payable 28 August 2026) and 1H2026 profit growth are from UOB’s own results release. [5] Calendar-year “cash received” totals (e.g. ~S$2.27 across 2025) mix fiscal years and specials and are not used here as the ordinary run-rate.

• Haw Par share price of S$15.06 and derived market cap / SOTP discounts are as of the 21 August 2026 close; the H1 FY2026 financial figures are as of the 30 June 2026 balance-sheet date.

References

[1] Haw Par Corporation Limited, “Condensed Interim Consolidated Financial Statements for the Half Year Ended 30 June 2026,” SGX filing, 14 August 2026. Announcement ID: RCSKDYV9X0P0K4OA.

[2] UOB dividend history: Stock Analysis (stockanalysis.com/quote/sgx/U11/dividend/) and UOB “Shares & Dividends” (uob.com.sg/investor-relations/shares-and-dividends/dividends.html), accessed August 2026. UOB FY2025 ordinary dividend S$1.56 (S$0.85 interim + S$0.71 final); the S$0.50 90th-anniversary special was paid in S$0.25 tranches across 2025; the April 2025 receipt of S$1.17 = S$0.92 FY2024 final + S$0.25 special tranche.

[3] Haw Par Corporation Limited, “Cash Dividend/Distribution — Mandatory: First & Interim Dividend of 20 cents per share,” SGX filing, 14 August 2026. Announcement ID: 5F8JVXONDOBYHLLC.

[4] “Haw Par Corporation: The Tiger Balm Conglomerate Hiding a S$3.4 Billion Portfolio,” The SEA Analyst, published 4 April 2026 (prior initiation article).

[5] United Overseas Bank Limited, “1H2026 financial results,” UOB newsroom (uobgroup.com/uobgroup/newsroom/news-releases/2026/uobgroup-1h26-financial-results.page), accessed 18 August 2026. FY2026 interim dividend of S$0.88 per share, payable 28 August 2026; 1H2026 net profit up ~3% year-on-year; interim represents ~50% payout ratio.

[6] Haw Par Corporation Limited, FY2025 full-year results and Annual Report 2025 (year ended 31 December 2025), SGX filings. Healthcare revenue down about 7% to ~S$240 million; by region, Americas/Europe/Middle East +6%, ASEAN −9%, rest of Asia −15%.

IMPORTANT DISCLAIMERS

This article is published for informational and educational purposes only. It does not constitute financial or investment advice, a recommendation, or a solicitation to buy, sell, or hold any securities. The author is not a licensed financial adviser under the Financial Advisers Act 2001 of Singapore. This content is exempt from the requirements of the Singapore Financial Advisers Act pursuant to Regulation 34 of the Financial Advisers Regulations, as it is published in a generally available publication. This publication does not take into account the specific investment objectives, financial situation, or particular needs of any individual. Before making any investment decision, readers should consult a licensed financial or investment adviser in their relevant jurisdiction. Past performance is not indicative of future results.

No Warranty: While the data and analysis have been prepared in good faith from public sources believed to be reliable, no representation or warranty, express or implied, is made as to the accuracy, completeness, or timeliness of the information. The author accepts no liability for any loss arising from the use of this material.

Disclosure: The author holds no position in the securities discussed. No compensation has been received from any company mentioned in this article.

The story is what management is doing with a cash-generative Singapore core: committing roughly US$113.2m to buy dental chains in Australia and Thailand [8], funding the deals with a mix of debt and freshly issued stock, and deferring its own secondary listing to press ahead [9]. Alongside that, its China-listed subsidiary Aoxin has doubled its share base to keep expanding, and the group has quietly agreed to sell most of its dental-AI arm for scrip.

The 27% headline is the least interesting number in the half.

The interesting one is that Q&M is committing close to a third of its market value to turn a Singapore compounder into a pan-Asian roll-up, and betting a lean team can integrate it.

Where the thesis stood

At initiation we called Q&M a coin flip at around S$0.60: a defensive, recurring Singapore dental platform wrapped in a multi-country acquisition story whose execution was unproven. The local press had already flagged that acquisition-led shift [7].

Three things carried weight:

1. the Singapore business as the durable core;

2. Aoxin as a China call option that could equally be a capital sink; and

3. the acquisition war chest as optionality the market was not paying for.

The core has held up. What this half does is turn the acquisition optionality into committed capital, which is a different risk.

The core that makes the bet possible

What makes the acquisition programme possible is the core, though not by paying for the deals directly. The core dental business earned S$15.0m of profit after tax this half, up 10%, on revenue of S$98.6m, and it throws off cash: the group closed the period with S$119.2m of it.

That cash generation and the balance-sheet capacity behind it are what let Q&M raise the S$130m of notes and issue stock to fund the offshore purchases; the acquisitions are paid in debt and shares, not out of half-year profit. The self-funding quality of the core is the whole basis of the thesis, and it is intact.

The group’s S$4.9m bottom line is what is left once the core carries everything else.

Start with the S$15.0m the core dental business earned: corporate head-office costs and unallocated group interest take S$8.9m of it, the other businesses (family medicine and aesthetics) lose S$1.1m, and minority interests, mainly the outside share of Aoxin, take another S$0.2m. Finance costs alone rose 57% to S$3.7m, the cost of the S$130m of notes issued last July.

Two one-off items also lift the 27%. This half’s S$5.4m of pre-tax profit includes a S$1.4m gain on the sale of the Jurong East property, about a quarter of the total; the year-ago S$4.8m base was the mirror image, held down by a S$4.3m non-cash loss booked when Aoxin and EM2AI were consolidated. The 10% rise in core-dental profit is partly bought rather than earned, too: this half carries six months of Aoxin against only one a year ago. Taken together, it is not the clean underlying growth it appears to be.

What does the real work is the S$15.0m core dental line, led by Singapore and Malaysia with the consolidated China clinics alongside. That is the annuity Q&M is now leveraging.

The full analysis below (the sizing of the bet, the deal structure, the Aoxin and EM2AI reads, the triggers, and the bottom line) is for paid subscribers.

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The top line is clean. Revenue grew 11.9% to S$855.4 million, gross profit 15.6% to S$272.4 million, and earnings per share reached 5.38 cents against 4.81 a year earlier. Sixteen new and comparable-new stores supplied 9.7 of the 11.9 points of revenue growth, comparable same-store sales added 3.3% on the back of June’s CDC vouchers, and the network now stands at 90 supermarkets in Singapore plus six in Kunming [1].

That is the quality leg of the thesis, delivered in full.

The price leg is untouched, and the cash question is only now beginning.

What we said in April

We initiated on Sheng Siong on 30 April 2026.

The business was never the question. Eleven straight years of dividends, gross margin that had climbed six points over a decade to 31.3%, mid-single-digit revenue growth turning into roughly 10% earnings growth, a share count unchanged since the 2011 IPO, and S$435.5 million of net cash. The question was the price.

At roughly 31x trailing earnings and just under 8x book, the stock left, in our words, limited room for it to be wrong. We reduced the whole case to one variable: whether the gross-margin engine of sales mix, house brands and direct sourcing could keep grinding higher. At that price, the market was underwriting that it would, with little room for a slip. The flip triggers we have tracked on the name turn on two things:

1. a dividend cut or a capex step-up that thins dividend cover, and

2. a deterioration in the Group’s HDB-tender competitiveness.

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The numbers

The first-half scoreboard validates the quality leg of the thesis and does nothing to relieve the valuation leg.

Three things sit underneath the headline.

First, the gross-margin gain is real and it is the number that matters most to this thesis. Management attributes the move to 31.8% to sales-mix improvement, and the mix effect held even as the cost base rose.

Second, the operating leverage below the gross line was partly absorbed. Selling and distribution expenses rose 15.7% to S$149.7 million and administrative expenses rose 14.0% to S$33.4 million, both driven by staff costs, which climbed to S$142.3 million from S$121.5 million on higher headcount for new stores, higher variable bonuses, and the September 2025 Progressive Wage Model increase. Operating profit still grew 15.7% to S$98.0 million, ahead of revenue, so the margin story survived the wage ratchet this half.

Third, cash and the cash flow statement need a second look. Operating cash flow for the half was S$54.8 million, down from S$86.4 million a year earlier. That decline is a working-capital swing, not an earnings-quality problem: trade and other payables fell S$68.7 million as the Group paid out accrued bonuses and settled vendor balances earlier than in the prior year, a timing item that sits inside the operating line.

Separately, the overall cash balance fell S$33.2 million over the half, to S$402.3 million at 30 June 2026 from S$435.5 million at 31 December 2025, as the operating inflow and modest S$8.4 million of capital expenditure were outweighed by S$57.1 million of dividends and S$25.7 million of lease payments in the financing line.

The Group still carries zero interest-bearing debt today, though a build of Sungei Kadut's scale may ultimately introduce some borrowing; the S$159.2 million of lease liabilities is store-lease accounting, matched by right-of-use assets on the other side. Finance income fell 44.5% to S$3.1 million as fixed-deposit rates came down, a small but growing headwind on a S$400 million cash pile as rates ease.

Step back from the half and the pattern is the real story. Gross margin has risen in every year of the past decade, from 24.7% in FY2015 to 31.3% in FY2025 [4] and 31.8% this half, six-plus points of expansion with no share issuance and no acquisition doing the work. That grind, sales mix, house brands and direct sourcing compounding quietly, is the engine the whole thesis rests on.

Testing the thesis

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The share price went the other way. It had climbed into the result, from US$1.18 on 7 August to US$1.33. After the numbers came out it reversed, sliding to US$1.26 by 14 August and on to US$1.15 by 19 August, near a 52-week low and below where the run had begun [3].

The reason for the gap between a confident headline and a falling price is not in the announcement. Part of it is in the accounts, where most of the profit growth is a currency swing that will not repeat and the operating margin actually shrank. The larger part is not in the filing at all: it is the thing the company left out, and the bigger story here.

One point the company has genuinely proved is worth stating plainly, even though it is not what moved the stock. Since 2024 it has raised the US price of the dye by about a quarter and now sells about a fifth more of it, a large increase met with more volume rather than less. Half of that you can see only by rebuilding a chart the company has stopped publishing.

The rest of the numbers, quickly. Sales rose 24% to US$87.2 million, or 31% excluding the software business sold last year. Gross margin improved to 86.6%. Vials shipped rose 11% to 589,511: America 377,616 (up 4%); EMEA 196,165 (up 24%); APAC 15,730 (up 45%). Cash and short-term liquid investments finished at US$197.6 million with no borrowings excluding lease liabilities. Full-year sales guidance narrowed to US$175 million to US$185 million. And the board declared the first post-listing dividend, one US cent a share, payable 4 September.

What we said in June

We started covering UltraGreen on 15 June.

Our argument was that 2025 profit looked worse than the business really was, for two dull reasons: an US$8.5 million tax charge that might get refunded, and a full year of almost no interest earned on IPO cash that only arrived in December. Fix both and we got to roughly US$87 million of profit for 2026.

We also put a stake in the ground. If second-quarter vials came in below 248,000, our explanation for a weak first quarter fell apart.

And we flagged the one thing the whole case depended on. UltraGreen had raised American prices three times: 60% in August 2023, 30% in April 2024, and again in the third quarter of 2025. American hospitals do not buy drugs one at a time. They buy through large purchasing groups that negotiate on behalf of hundreds of hospitals at once. Whether UltraGreen’s increases survived those negotiations was, in our words, “the single most important undisclosed structural variable in the filings.”

We named a second risk too, and set it right behind the first. In June the field was empty: UltraGreen held both US approvals and the FDA’s own register showed no rival, so a hospital paying the higher price had nowhere else to go. We put a generic entrant on the short list of things that would break the thesis, calling it the event that would “change the pricing architecture permanently.” We thought it distant. It was not.

So we came into this filing with two questions left open from June: the buying groups, and the generic.

It answers both. One held. The other happened. Neither answer is in the part the company wrote for journalists.

The numbers behind the headline

Two things to clear up before we get to the interesting part.

First, that 45%. Almost all of it is a currency swing that will not repeat. The company lost US$7.02 million on currency moves in the first half of 2025, and almost nothing in the first half of 2026. The 45% sets this year’s clean profit against last year’s currency-hit profit, so the growth rate looks bigger than it is. Strip the currency noise out of both halves and profit grew about 16%, which is exactly what the company’s own adjusted EBITDA grew. The company all but concedes the point: its slide credits the 45% to “significantly lower foreign-exchange losses recorded in 1H2025.” The figure is real arithmetic, but it is about three times the growth the business actually delivered, and the cause is already fixed, with every subsidiary moved to dollar reporting in January.

Second, interest income. It was US$2.47 million for the half, up from just US$67,008 a year earlier. Double it for a full year and it reaches about US$5 million, the bottom of the US$5 million to US$7 million we forecast in June. We were right that the IPO cash would throw off real interest income. Our range was just a little too high.

Did the thesis hold?

Volumes: yes, comfortably

The half-year filing gives six-month totals only, but the company published a full quarterly chart back in May [1], so subtraction does the rest. Second-quarter vials: 308,611. Our line was 248,000. It cleared it by 24%. Against the same quarter last year it is up 38%. It is the biggest quarter the company has ever had.

So our explanation for the weak first quarter holds. But the number that actually matters is the American one, and that is the number the company has stopped giving.

That is one thing the company left out of this filing. There is a bigger one, the very risk we flagged in June, and it has nothing to do with volumes.

In the roughly five weeks before these results, the US Food and Drug Administration approved two competing indocyanine green products.

• On 10 July it cleared a ready-to-use version from Provepharm called ZYOGREEN, now approved and listed for the US market [6][9].

• On 3 August, nine days before UltraGreen reported, it approved a straight generic from Zydus, one of India's largest generic drugmakers, under a programme the agency runs for markets it judges short of competition; Zydus announced it the next day [7][8].

For a company whose whole worth rests on being the only place to buy this dye at these prices, that is the most important development of the year, and it is the one thing the announcement does not mention.

That is the week the story changed. What it does to everything else in this filing is what the rest of this update is for.

The rest of this update is for paid subscribers: what those two FDA approvals do to the thesis, the reconstructed US quarterly series the company stopped printing, the seam answer (where the price increases actually went), the operating-leverage teardown, the tax, dividend and governance record, and the valuation at US$1.15.

Read more

That number is the S$1.2 million of profit the company reported for shareholders, and the results-day headlines led with it [1]. It looks alarming, but it is misleading. It comes from an old ownership structure that ended on 1 July, the day after this period closed. It will not be there next time.

The number that matters is the margin, and it slipped. The business kept less profit from each dollar of sales than a year ago. Adjusted profit fell 17% to S$16.1 million, even though revenue rose 20%. The adjusted EBITDA margin dropped from 37.3% to 30.8%. That is what the market reacted to, and it is the number the whole valuation is built on.

The result came out on 13 August, after the market closed. The shares fell from S$0.805 to S$0.740 the next day, about 8%, then recovered over the following two sessions to S$0.775 by 17 August, back above the S$0.76 they listed at on 8 July. The half also carried S$5.4 million of one-off IPO and acquisition costs, against S$0.6 million a year earlier.

Prior Thesis Recap

We first wrote about Foundation Healthcare on 29 June, while the IPO was still open [2].

Our point then was simple. This is a good business, but it was coming to market through a structure that flatters its earnings just before listing. In FY2025 the group earned S$41.2 million, but only S$14.0 million reached shareholders. The doctors still owned 40% of most of their own practices, and took their share first. A pre-IPO deal called the Share Swap, done on 1 July, bought those doctors out and moved that profit to shareholders. We said the swap was struck cheaply and was good for new investors. We also said the real thing to watch was not the fast revenue growth, but what happened to margins once the practices sat inside the group. At the time we noted the stock listed at 21 to 25 times its pro forma earnings and 13 to 15 times pro forma EBITDA [2]; on the group's pro forma adjusted profit of S$51.4 million, the swap-neutral base we use below, that is about 20 to 24 times. This is the first result we can test that against.

New Financial Data

Here is the thing to understand about that S$1.2 million, because it explains this result and the next one.

Profit is counted before it is split between the group and the doctors who own minority stakes. The margins, the revenue growth, the adjusted profit, all of it is measured before that split. The Share Swap only changes the split. It takes the doctors’ share and gives it to shareholders. It does nothing to the profit the business makes in the first place.

So the S$16.1 million of adjusted profit the group earned this half is the same whether the doctors own 40% or nothing. This half ended on 30 June, one day before the swap. The old split still applied, so the doctors’ share, the non-controlling interests, took S$11.5 million of the S$12.7 million reported. And the S$5.4 million of acquisition and capital-raising costs, mostly the IPO, landed on shareholders too. That is how a business earning S$16 million of adjusted profit reports S$1.2 million to its owners.

Next half, the swap runs the same trick in reverse. The doctors’ share is gone, so shareholders keep almost all the profit, and the headline earnings will jump. That jump will look like a big recovery. It will not be one. It is just the swap.

The simplest way to hold this in your head: the swap changes the size of your slice, not the size of the pie. This half it made a decent pie look like a sliver. Next half it will make the pie look bigger than it grew. If you want to know how the business is really doing, ignore the slice and look at the pie. And the pie got thinner this half.

That is the real news. The business made less profit on each dollar of sales. Adjusted profit margin fell from 18.1% to 12.5%, so even with 20% more revenue, adjusted profit went down.

This matters because of what the market paid for.

Read more

Update on 2 September 2026

Since this update published, the catalyst we described as quiet has moved. On 1 September Jollibee disclosed that it is contemplating a proposed Hong Kong Main Board listing of its international business, to be held by the listing vehicle, Jollibee Foods Corporation International (JFCI).

Existing JFC holders would receive JFCI shares corresponding to their prevailing JFC interest, effectively an in-specie distribution. Richard Shin, JFC's Chief Financial and Risk Officer and CEO of JFC International, was named to lead JFCI. JFC itself stays PSE-listed with the Philippine business.

The company calls the plan preliminary, subject to restructuring, market conditions, and required corporate, regulatory, and HKEX Listing Committee approvals, with no assurance on final terms, timing, or completion; no size or valuation was given. JFC closed at ₱152.80 on 1 September, below the ₱156 close after the August results and above our ₱147.10 initiation anchor. [6]

This advances the thesis rather than upsetting it.

The venue-mirage argument was that a US listing cannot hold a US growth multiple; picking Hong Kong over a US listing makes a US-style re-rating far less likely, since Hong Kong-listed Asian restaurant and coffee names trade nearer Asian marks.

We read the choice as pointing toward crystallisation at roughly the arm's Asian value, not proving it, since venue alone does not settle valuation.

The pro-rata structure looks friendlier than feared for a Manila holder, who gets the shares directly rather than through an access wrapper, though tax, currency, and custody frictions remain. And the announcement is silent on the JWPL 2025 notes' change-of-control put, under which holders can require JWPL to repurchase their notes at 101 percent upon a Change of Control Event, including if JFC ceases to own, directly or indirectly, at least 50 percent of JWPL's outstanding voting stock, a real constraint if JWPL sits inside the separated group [4][7].

The muted response fits our frame: a listing may crystallise value, not multiply it. We will cover the mechanics when the circular or notice to bondholders appears.

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This is an update to our 22 July 2026 initiation. It is for informational and educational purposes only, is not investment advice, and its author is not a licensed investment adviser. The author holds no position in Jollibee Foods Corporation and has not traded in it in the 30 days before publication.

On 11 August 2026 Jollibee led with a record. Net income to the parent (NIAT) of ₱3.40bn, up 5.7 percent on the year and up 130.5 percent on the first quarter, the best quarter the group has ever printed [1]. Revenue rose 10.7 percent to ₱85.9bn. System-wide sales grew 14.2 percent. The gross margin clawed back to 18.5 percent from 16.5 percent in Q1 and left June at 19.0 percent [1]. Same day, the board approved redeeming the ₱9bn Series B preferred (JFCPB) and trimmed parts of the full-year guidance [1][2].

The market liked it. Shares jumped about 5 percent to ₱156.00, above the ₱147.10 we anchored three weeks earlier [5]. Fair enough on the quarter. The half is another story: first-half NIAT was ₱4.87bn, down 13.3 percent year on year, operating income down 7.1 percent, net income down 16.7 percent [1]. So the record Q2 is a bounce off a weak, cost-pressured Q1, not a higher earnings base. And look under the operating line. Q2 income before tax actually fell 1.7 percent, to ₱4.84bn. NIAT rose anyway, because the tax rate dropped from 30.6 to 27.3 percent and the minority share fell 39 percent [3]. That gap, between the headline and what sits beneath it, is what this update is about.

Prior thesis recap

Our 22 July initiation made three claims.

1. The profit is almost entirely Philippine. Two-thirds of the stores are overseas, yet the international arm loses money at the net line while the home business pays for the build-out.

2. This is not the net-cash compounder some assume. At FY2025 the group carried about ₱86.5bn of debt against ₱34.9bn of cash, net debt near ₱52bn, plus ₱52.8bn of leases.

3. The “venue mirage.” A US listing of the arm can crystallise value but cannot sustain a US growth multiple, so its value is already explainable on Asian marks and needs no re-rating.

No price target. The sum-of-the-parts ran ₱145 to ₱225 on limited debt, ₱114 to ₱194 once the arm carries its fuller net debt. This quarter tests all three.

New financial data

The margin recovery is real, and we said as much. Pricing from April, plus sourcing and cost discipline, took the gross margin from 16.5 percent in Q1 to 18.5 percent in Q2, and June exited at 19.0 percent gross, 9.1 percent operating and 6.2 percent NIAT, the best run-rate of the year [1]. Group EBITDA rose 7.3 percent. No argument there.

It just was not broad. The EBITDA growth came from the Philippines, where EBITDA rose 12.8 percent. International EBITDA fell 0.4 percent, weighed down by ₱239m of transition costs as Smashburger and Yonghe King close stores and move to franchising [1]. Take out the home engine and the overseas arm grew its earnings by nothing this quarter.

Thesis check

Bear: “the profit is almost entirely Philippine.” Validated. The quarter says it in the segment lines. Philippine EBITDA up 12.8 percent, international EBITDA down. And yet international system-wide sales grew 25.4 percent, led by Highlands Coffee (+46.7 percent), Compose (+39.7 percent), Tim Ho Wan (+23.0 percent), Jollibee North America (+21.6 percent) and Milksha (+12.4 percent) [1]. Fast sales, no earnings. That is the shape we drew: a coffee-led arm that is real and growing and does not yet pay the group’s bottom line. The bull points at the 25 percent. The income statement still says Manila.

Bear: “not net cash; leverage is real and rising.” Validated, and worse. The balance sheet went the wrong way.

• Gross interest-bearing debt rose to ₱93.2bn at 30 June from ₱86.5bn; cash fell to ₱29.8bn from ₱34.9bn.

• Net debt ex-leases climbed to about ₱63.4bn from ₱51.6bn, up roughly ₱12bn in six months, near 1.5 times annualised EBITDA against about 1.2 at year-end [1][3].

The composition is the tell we flagged: senior notes fell ₱16bn to ₱36.6bn as JWPL redeemed the shorter 2020 tranche, but bank debt rose ₱21.9bn. “Partly refinanced with bank borrowings,” on the page. Financing interest rose 9.8 percent [3]. The record NIAT swallowed that bigger interest bill; it was not handed a smaller one.

Bear: the ₱9bn preferred redemption is another call on that same cash. Redeeming all nine million Series B preferred at their ₱1,000 price, about ₱9bn, on 14 October helps common holders a little in isolation: out goes a claim and a dividend that sit ahead of them [2]. But the balance sheet is already tighter than six months ago, and this is the same cash the change-of-control bond put we analysed at initiation could one day demand [4]. Pay it from cash and group cash drops toward ₱21bn. Pay it from debt and net debt heads toward ₱72bn. Either way, the liquidity we called committed gets more committed.

Bull: the coffee-led engine is real. On sales, not yet on profit. Highlands and Compose are compounding system-wide sales north of 40 percent. Jollibee Vietnam is the standout, same-store sales up 17.9 percent, store payback under four years. The group folded in Shabu All Day, a Korean brand under Jolli-K (172 stores acquired, 156 in the network at 30 June), about 5 percent of international sales [1]. The asset-light turn shows up where it matters: China’s franchise ratio is 62 percent, from 14 percent in 2016; Yonghe King is at 65 percent and aiming for 70; Canada added franchise development deals. This is the honest, non-venue route to a higher multiple we named as a trigger. It has not landed. International EBITDA is still flat-to-down, because the very restructuring that makes the arm asset-light costs money now. The winners win. The arm, as a whole, does not yet pay.

Flip trigger: “Compose and the coffee platform inflect to clear, sustained group-level profitability.” Not crossed. The one thing that would hurt us most is the overseas arm turning profitable at the net line. It went the other way. International EBITDA fell. We are watching for the quarter when “the profit is almost entirely Philippine” stops being true, and this half moved away from that, not toward it.

Bear: the venue mirage. No real update; the catalyst stayed quiet. Fifteen pages on record earnings, margins, capital-light growth and awards, and not one on the separation or the US listing, the centre of the whole bull case [1]. The 17-Q is barely louder: a routine subsidiary note tied to the planned spin-off, with no venue, no timing, no strategic-review update [3]. In January this was the headline. This quarter it is a footnote. One release is not cancellation, and we will not pretend it is. But it fits the drift we mapped, firm January plan to hedged June review, and it is not how a company markets a re-rating. A mirage stays a mirage while nobody points at it.

Risks revisited

Two risks moved.

1. Leverage moved up. Net debt rose about ₱12bn in six months, the preferred adds another ₱9bn, and the flexibility is thinner, so the change-of-control put, if a separation ever fired it, would hit a tighter balance sheet.

2. Execution moved down, a little: the margin recovery and the franchise discipline in China and North America show management can react to cost and will eat near-term charges to get asset-light.

Against that, the guidance cut. Full-year same-store growth trimmed to 3-4 percent, gross openings to 1,000-1,100 stores, operating-income growth to 10-15 percent, a quieter outlook than a year ago [1].

What to watch

Three things.

1. International EBITDA first: the quarter to wait for is the one where the Smashburger and Yonghe King costs roll off and the coffee winners are big enough to lift overseas earnings, not just sales. Until then the trigger holds.

2. The separation second: the next annual meeting, or any circular or notice to bondholders, answers the venue question, and its absence from results talk is itself worth logging.

3. The balance sheet third: the 14 October redemption, capex of ₱13-15bn, and whether net debt keeps climbing into the second half will tell us whether “committed liquidity” is easing or worsening. The 17 August briefing is the first chance for management to speak to any of it.

Bottom line

Call it a beat. We read it as a confirmation. Jollibee posted a real, home-led margin recovery and a record headline NIAT, and did it while the half was down double digits, overseas earnings went backwards, net debt rose about ₱12bn, and the US listing behind the bull case drew nothing but a footnote. None of that moves the initiation. The profit is still Philippine. The balance sheet is still levered, and more so. The venue mirage is quieter, not louder.

We stay non-directional, no price target. At ₱156 after the pop, the market sits in the lower half of our limited-debt band and above the fuller-debt one; the framework holds. JWPL’s own note balance fell as it redeemed a tranche, which helps the arm’s standalone equity a touch, but group net debt rose and a ₱9bn preferred call is booked, so the capital-structure-dependent range, with its wide gap between the two debt cases, matters more now, not less.

What would change our mind has not: an arm that turns durably profitable at the net line, or a separation document that gets more value, more cleanly, to a Manila holder than we expect.

Neither showed up this quarter. A record was set. It was set at home.

Data Integrity Notes

Q2 and 1H 2026 figures are taken from Jollibee’s 11 August 2026 press release and the accompanying SEC Form 17-Q; balance-sheet figures are from the unaudited consolidated statement of financial position as at 30 June 2026 in the 17-Q [1][3]. System-wide sales and same-store sales growth are management metrics and are not part of the audited financial statements. Net debt is our calculation (short-term debt plus current and non-current long-term debt plus senior debt securities, less cash and cash equivalents) and excludes IFRS-16 lease liabilities of ₱52.8bn. The ₱9bn preferred-redemption figure is nine million JFCPB shares at a ₱1,000 redemption price plus accrued dividends, per the 17-C redemption disclosure [2]. The share price of ₱156.00, up 5.05 percent on the day, is the PSE quote at the time of writing [5]; our initiation anchored ₱147.10 on 20 July 2026, so the stock has risen into the results and should be refreshed at publication. The results press release did not mention the US listing; the 17-Q carries a routine subsidiary disclosure tied to the planned international spin-off but no venue, timing, or strategic-review update [3]. This is our reading of the filings, not a company statement that the plan has changed.

References

[1] “The Jollibee Group Reports Record Q2 2026 Results, with Margin Recovery from Controlled Pricing and Record-High Quarterly Net Income Attributable to Equity Holders of the Parent Company,” Jollibee Foods Corporation press release (PSE 17-C, Form 4-31, C06118-2026), 11 August 2026.

[2] “Redemption of Series B Preferred Shares,” Jollibee Foods Corporation (PSE 17-C, Form 4-21, C06121-2026), 11 August 2026: 9,000,000 JFCPB shares at a ₱1,000 redemption price plus accrued dividends, less customary transfer costs, redemption date 14 October 2026, record date 30 September 2026, kept as treasury.

[3] Jollibee Foods Corporation SEC Form 17-Q for the quarter ended 30 June 2026 (PSE CR06002-2026), 11 August 2026: unaudited consolidated statement of financial position and statement of comprehensive income. Gross interest-bearing debt ₱93.2bn, cash ₱29.8bn, senior debt securities ₱36.6bn, long-term debt ₱40.6bn (current plus non-current), lease liabilities ₱52.8bn.

[4] The SEA Analyst, “Jollibee’s Global Arm Is Real. Its Wall Street Re-Rating Is a Mirage.” (initiation), 22 July 2026. https://www.theseaanalyst.com/p/jollibee-jfc-philippines-pse-stock-us-spin-off

[5] Jollibee Foods Corporation (PSE: JFC) share price of ₱156.00, up 5.05 percent on the day, the Philippine Stock Exchange quote as at 11 August 2026. https://www.pse.com.ph/company-information-JFC/

[6] Jollibee Foods Corporation, SEC Form 17-C / PSE disclosure, “JFC Advances Planned Spinoff of International Business; Selects Hong Kong for Proposed Listing and Names JFCI CEO,” 1 September 2026 (signed by CFO and Chief Risk Officer Richard Chong Woo Shin). https://edge.pse.com.ph/downloadHtml.do?file_id=1962201

[7] Jollibee Worldwide Pte. Ltd., Final Offering Circular dated 25 March 2025 (SGX): change-of-control put at 101 percent triggered if JFC as guarantor ceases to own at least 50 percent of JWPL’s voting stock. https://links.sgx.com/FileOpen/JOLLIBEE%20WORLDWIDE%20PTE.%20LTD.%20-%20Final%20Offering%20Circular%20-%20dtd%2025%20March%202025.ashx?App=Prospectus&FileID=65389

On the figures themselves the documents agree.

• Revenue for the six months to 30 June rose 24% to US$80.8 million.

• Cash EBITDA, the company’s measure of what the business generates after rent is actually paid and after corporate costs, rose 147% to US$10.6 million, lifting the margin from 6.6% to 13.1%.

• Free cash flow was US$3.2 million, against US$0.9 million a year earlier.

• The group ended the half with US$169.4 million of cash and no bank debt.

• It also reported a net loss of US$0.8 million, or a profit of US$0.1 million once one-off listing expenses are stripped out [6].

Two things came with the numbers.

1. The board intends to pay out 50% of net profit after tax from FY2027, the first dividend policy in the company’s history.

2. And the network reached 57 operational centres and 37,350 workstations, from 50 and 35,067 at the end of December, with 21 more centres described as committed.

The shares closed at S$0.630 on 6 August, before the release [13]. In the first session after it, on 7 August, they closed at S$0.640, up 1.6%, having traded between S$0.615 and S$0.660 on 1,282,200 shares against 455,100 the day before [1]. That leaves the stock 32% below the S$0.94 offer price of eleven weeks earlier.

What we said in May, and what we got wrong

Our 15 May initiation read the offer document [8] and declined to give a verdict on the price. The position we published was that both cases were true at once: a working operator with city-level density, and a structure carrying US$402.2 million of lease liabilities against US$40.4 million of equity, priced at roughly 130 times a maiden profit that leaned on a one-off gain. We wrote that the offer was “not a value entry point” and that it “asks the buyer to underwrite the next two years of expansion going broadly to plan”.

That piece named the dependencies but published no scorecard. It said that “every one of the bull points depends on the occupancy cycle staying friendly”, that “the maiden profit is flattered by a one-off”, and that “the raise itself adds 28 centres of fresh lease liability and the associated drag before those centres mature”. We are putting thresholds on those dependencies here, and adding one on how the expansion is paid for, as four tests of the franchise rather than of the price. This result is the first that can score any of them.

1. The occupancy test fails if group occupancy drops materially below 80%, or if the renewal rate reverses from the 72.0% it reached in FY2025.

2. Payback fails if new centres stretch well beyond the historical 16.4-month weighted average.

3. Profitability fails on the first post-listing result that shows an underlying loss once one-off items are stripped.

4. Funding fails on any sign that the expansion is being paid for by re-leveraging instead of by the IPO proceeds and internal cash.

Two things in that piece were wrong, and the second one we only found on re-reading the prospectus for this update.

The first is the call itself. We wrote that the post-listing share price would "partly reflect scarcity rather than fundamentals, which flatters it now and creates an overhang later". Instead the stock opened at S$0.835, closed its first day at S$0.775, 17.6% below the offer price, on 10.9 million shares [2], and has since traded as low as S$0.495 [1][3]. Scarcity supported nothing. The cohort was weak too, with all six companies that listed on SGX in 2026 trading flat or below their offer price as at 22 July [5], though that report gives no magnitudes, so we cannot say where JustCo's 32% ranks among them.

The second is the arithmetic underneath it. We described the float as 6.6% and said the cornerstone tranche would be released by a six-month moratorium in the fourth quarter. The offering was indeed 32,092,000 shares, or 6.56%. But the prospectus states plainly that “the Cornerstone Investors are not subject to any lock-up restrictions in respect of their shareholdings” [8]. Their 74,291,000 shares, a further 15.19%, could be sold from day one. The sellable pool at listing was therefore about 21.7% of the company, not 6.6%, and there is no cornerstone unlock ahead to price. We got that wrong in May and we are correcting it here.

The filings also show how thin the real demand was. DBS, as stabilising manager, bought 5,319,000 shares between listing and the close on 2 June, when it told the market that the over-allotment had been fully covered and the option would not be exercised [9]. That figure is 16.6% of the entire offering [10]. Through those first two weeks of trading, DBS bought back the equivalent of one share in six of the 32,092,000 Offering Shares. The price fell further once that stopped.

Where the growth came from

The revenue increase decomposes cleanly. Average occupied workstations rose about 12%, and revenue per occupied workstation rose 11%. Multiply the two and you have the 24%.

The extra workstations came from an acquisition. JustCo bought the remaining 51% of its Japan operations on 1 July 2025, so the first half of 2025 contains no consolidated Japan revenue and the first half of 2026 contains six months of it. Japan was an associate before that, so a share of its operating EBITDA does sit in the 1H2025 Cash EBITDA reconciliation, US$0.3 million of it, recorded in North Asia. That is the acquisition the review of performance names and the press release does not.

North Asia revenue went from US$15.3 million to US$27.1 million. That single segment accounts for 75% of the group’s entire revenue increase. On Cash EBITDA, North Asia went from US$1.1 million to US$5.4 million, or 68% of the group’s increase on the reported basis, and 73% if the equity-method share is stripped out of the 1H2025 base. Strip North Asia out and group revenue grew 7.7%.

Two operating metrics that JustCo published at the IPO are absent from all three documents it filed on 6 August: the membership renewal rate and the payback period on new centres [6][8]. For a business whose memberships run about 15 months against leases of three to fifteen years, those are the two numbers that say whether the model is working. Neither has been published since the prospectus.

Below the paywall: the half of the business with no acquisition in it more than doubled its Cash EBITDA. Rent took about 95% of the cash the business generated, leaving US$2.7 million. We score the result against four tests of the franchise, including the metric the company published at the IPO, and restate every valuation anchor at the 7 August close.

Read more

HL Global Enterprises reported its half year results on 3 August. Cash and bank balances rose again, to S$64.07 million from S$63.48 million at the year end. The shares are S$0.385 [1], which puts the market capitalisation at about S$37.1 million across the 96,334,254 shares in issue. The cash is therefore worth roughly 173% of the entire company, or 177% excluding the 2.4 million shares held in trust for a dormant option scheme, as the company does when it reports net asset value per share.

That gap has widened, not closed. When the Securities Investors Association (Singapore) put its questions to the board ahead of the April annual general meeting, it cited a market capitalisation of about S$45 million against S$63.5 million of cash. Four months later the cash is higher and the market value is lower.

The operating half was fine and beside the point. Revenue rose 12.2% to S$3.19 million on a better first half at the Cameron Highlands hotel. Net profit fell 10.0% to S$406,000: interest income on the cash dropped 30.7%, or S$252,000, as deposit rates came down, which was more than the S$237,000 improvement in the hospitality segment result. No dividend was recommended, in the same sentence the company has used in each of the last three interim filings.

What is worth reading is the board’s answer to SIAS. Asked directly whether share buybacks, special dividends or a broader strategic review had been formally evaluated, and on what timeline, the board replied: “While the Group maintains a positive cash position, it has not generated sufficient recurring profits in recent years to enable the declaration of dividends.” It added that it had considered various capital management and strategic options from time to time, and that “to date, no options have been identified that meet the Group’s strategic and financial criteria.”

Asked separately what drives the discount, the board listed the group’s size, limited trading liquidity, earnings profile, the concentration of its operating assets in a single hospitality location, and “the absence of dividend distributions in recent years as the Group conserves cash for operations and investment.” It named the absence of dividends as a cause of the discount, and then gave the absence of profits as the reason for the absence of dividends.

Both statements are accurate. The listed parent does carry accumulated losses of S$55.98 million and has no retained earnings to distribute from. But a shortage of distributable profits is a solvable problem rather than a permanent condition, and the mechanism is a capital reduction, which does not require distributable profits at all [2]. Two SGX-listed small caps used it in 2024, one to clear accumulated losses and one to hand back cash while loss-making [3][4]. HL Global used it itself in 1990, and the S$12.47 million special reserve still sitting on its balance sheet is what remains of that exercise. It has not proposed another since the 2017 disposals that created the cash pile, and it did not put a buyback mandate to the April meeting either.

Our position is unchanged. The market is not mispricing the cash. It is pricing the chance that anyone ever acts on it.

References

[1] HL Global Enterprises (SGX: AVX) share price and market data, at the 6 August 2026 close of S$0.385. https://stockanalysis.com/quote/sgx/AVX/

[2] Companies Act 1967 (Singapore), Division 3A of Part 4, sections 78A to 78K, on the reduction of share capital, including the court-approved route and the solvency-statement route. https://sso.agc.gov.sg/Act/CoA1967

[3] mDR Limited, “Circular to Shareholders dated 25 September 2024” in relation to a proposed capital reduction cancelling S$27,397,446 of accumulated losses against share capital, the company’s third such exercise after 2019 and 2021. https://links.sgx.com/1.0.0/corporate-announcements/OO9M37GKC7L839S3/819699_MDR_Capital_Reduction_Circular_25September2024.pdf

[4] Global Testing Corporation Limited, “Circular to Shareholders dated 5 April 2024” in relation to a proposed capital reduction and cash distribution of S$0.05 per share. https://links.sgx.com/1.0.0/corporate-announcements/HQ8T8ZBUH7YGHUYT/794834_GTC%20-%20Circular%20to%20Shareholders%20dated%205%20April%202024.pdf

Primary filings (SGX disclosures, no inline citation): HL Global Enterprises Limited, unaudited half year financial statements for the six months ended 30 June 2026 (3 August 2026); full year results for FY2025 (13 February 2026); half year results for 1H2025 and 1H2024; Annual Report 2025; Minutes of the Sixty-Third Annual General Meeting held on 21 April 2026 (19 May 2026); and Responses to Questions Received from the Securities Investors Association (Singapore) (15 April 2026).

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