Full Divestment of Infinity Development Holdings

I usually don't talk about portfolio movements of a specific company. But i feel that i should for this company since i talked about this company last year in Sept 2025.

Given that the price was 2.44 last year at Sept and now its 2.49 after 2 rounds of dividend, i would say things have been relatively stable in terms of capital gains and after factoring 2 rounds of dividend totalling of 0.182.... returns stand at around 9.5%. Not bad...

But definitely not great considering how other major stocks like DBS and STI index have at least double digit returns.

I think i have given this company many chances the past 9 to 10 months. I will list the reasons that together led to a decision to divest.

Before listing the reasons, i will still say that there is still a chance the company can pass cost effectively but at least from how i see it and the lack of information present....its hard for me to believe it could.

1. Poor Q&A at AGM.

This was the questions i sent and asked for the AGM. Unfortunately i think Q1 / Q4 / Q5 /Q6 is not answered. Where as their answer for Q3 is just a brief description of the production volume.

Q2 was well answered.

Overall, i think it was not insightful.

2. Investor Relations and Corporate Finance Team they found for the SGX Listing is not responsive.

There was factory visits but apart from that the corporate finance team does not reply to any emails and the investor relations from the company side is dead even though at the AGM , retail shareholders were told that if they have queries they can email investor relations....

I just asked if there is any results presentation and i got ghosted fully. Compared to another pr company which does send invites out for results presentation....the action of ghosting probably works in the older times climate but given that 'value up' is a preposition then investor outreach should be important.

Also, i heard that there has been no engagement with analyst for the 1H Results or at least i was unable to find any updates.

3. Random Share Buyback.

After issuing shares at 2.32 HKD equivalent in sgx, the company proceeds to buyback HK Shares at 2.39 to 2.46. They did a buyback on 23 March and 30 March. Bringing the trading volume to 3.8m and 3.7m shares.

I get that it has the effect of calming the markets especially that was peak oil price and volatility was high.

It feels like helping someone to get off the train or something cause the trading volume since then has been around 50k shares to 490k shares.

I think when coupled with the lack of explanation for any meaningful purpose of a buyback at a price higher than issuing shares, it looks like poor corporate finance.

4. Oil Price Increase

Without a doubt, one of the reasons for the improvement in margins have been oil price declining resulting in cheaper prices for raw materials like methyl ethyl ketone (MEK). The price of MEK has been 7000 pre march 2026. At peak of oil price in March 2026, it rose to around 14000 and has retraced to levels of 8000 now. While the increment seems rather low, oil price has remained at elevated levels which provides a worry if they are unable to pass on the cost.

5. Guidance from Industry Leader Nanpao looks bleak

In the 1Q Results Conference, they estimated low single digit growth for their shoe adhesive business. 2Q Margins will be lower than 1Q

In terms of shoe adhesive business, they mentioned price revision once every half a year.

As such, it does look bleak.

6. Poor 1H Results from Infinity

Given that Nan Pao's 1Q 26 and Q4 26 Blended Margins is a record high, i was expecting margins to hold up even if revenue has a slight fall.

Unfortunately, its Gross Profit Margins of 36.50% is a new low seen since Oct 2023

It fell short of my expectations. I wonder if the oil price increase in March really ate so much into the margins. Especially when from Oct 25 to Feb 26, oil price is lower than previous periods such as Apr 24 to Sep 24.

7. World Cup Effect seems to not have kicked in as anticipated

It tends to do well in World Cup Years but it seems like the World Cup effect might have been muted.

Observing this from 2 source, its major customer Yue Yuen and its believed 2nd major customer Fulgent Sun.

Its worth noting that Indonesia Shoe Exports is higher in April 26 vs April 25 while lower in March 26 vs March 25 due to festive holiday effect. This could be a factor why overall revenue was slightly lower for Infinity Development which is led by lower Indonesia Revenue.

After a 6.9% growth in April 2026, momentum reversed with 6.6% negative growth in May 26

For Fulgent Sun, the similar can be seen while the decrease is on a higher %.

Given that revenue is flattish in the past 6 months from Oct 25 to Mar 26, Apr and May did not show overall good growth, June is the WC Month........it makes me think that the effect this time round might not be good.

Personal Apology

I apologise if the stock did not bring positive returns because i do receive text saying i did not huat because of infinity development and i replied i also nvr huat from it cause if i did i probably will come out a new post which is X million at Age 32.

At peak this position is probably around 40% to 50% in the portfolio.

I hope you could tell i was really convicted at some point of time and not just thinking it goes up but totally not convicted in portfolio sizing terms.

Conclusion

It still paid a good dividend this time around and only retraced revenue by 1.9% despite major customer showing negative revenue growth of around 3% and volume retracement of around 6%. The share buyback might prove to be a price floor if the share price gets tested. 

Ultimately the lack of communication, my personal worry of unable to pass cost well due to surge of oil price, the shoes export momentum not being carried by the world cup effect as well as results not up to my own expecations all contributed to this position to be removed from being a core to holding 1 lot to go AGM. 

I might be wrong in my analysis and the company does well then oh wells it happened too many times before.... but based on my analysis at current point, its a sell.