Quick Thoughts on Infinity Development Results (Hkex: 640 / Sgx: ZBA)

Infinity Development released its FY 2025 results on 29 December.

I think this set of results is borderline acceptable. At this point, I will not be selling any at current price based on current information and my initial analysis of the results. 

I will talk about the negatives first

1 thing that definitely shock me was how their performance was in August and September.

Total equity has increased only 11 million from End July to End September. This made me wonder if they earned 11 million only in 2 months while making 57 million from End March to End July (Based on previous post analysis).

On this end, i am negatively shocked actually. Perhaps if i have the chance to ask about this, i would. I wonder if start-up cost of Indonesia Factory might have affected results but on the surface, when comparing 1H 2025 and 2H 2025, i cannot find any significant increases.

Of course, there is another theory is that its not retained earnings so we cannot really tell if earning 11m in 2 months is really true, other reserves might have decreased from End March to End July before increasing again and artificially inflated the number.

Which brings me to my next point on why i think this result is acceptable.

2H 2025 > 1H 2025. Revenue increased by 4% .On the revenue front, both Vietnam and Indonesia have seen growth in revenue year on year. Pretty in line with the macro data that is positive too. Although Vietnam's growth (3.6%) lagged behind 9.6% of the macro data.

Gross Margin has improved from 37.4% to 38.3%. This gross margin is also a record high. 

Which got my head scratching because if August and September is bad, they still managed a higher profit and gross profit / gross profit margin.

On the dividends front, it looks like they have cut the dividends from 10.8 cents to 10.3 cents. On closer look, we need to remember the placement shares which is a 12% dilution. Factoring that, the dividend per share is higher. Overall dividend paid is higher as well. It is encouraging to see that the company continues to follow its dividend policy despite the recent placement.

Moving forwards, the upcoming 6 months from December 2025 should be crucial months where revenue 'has/is expected' to outperform because it is World Cup Year. 

Monitoring of Export Data, Customer Sales would be important to see if this effect really flows through.

Having said that, their major customer is now 20% of FY 2025 revenue. It is a decrease from 21% in FY 2024 and this shows lesser reliance on top customer.

Currently, the highest revenue is in FY 2022 (In particular 2H FY 2022 whereby it is Apr 22 to Sept 22 as world cup is in Nov 2022). 

The new Indonesia factory should come online just in time for the WC Season, though whether the margins will be on par soon as other factories will be another question altogether.

Given the expanded share count, its trading at around 6.4x PE. Yield is around 8%.