Q4 2025 YSPSAH: A good quarter?

 

I am very lazy nowadays. Just have time to summarize the findings of YSPSAH recent quarter result. YSPSAH just reported its Q4 2025 earning as below:

As expected, due to the strengthening of MYR against USD, it booked another forex loss of RM 4M this quarter (vs. gain of RM 3 M Q4 2024). This reported figure is the combination of realized and unrealized forex loss. To know the exact numbers of each category, we have to refer to the upcoming annual report. No choice. However, according to my research (from FY2016 - FY2024), regardless of the fluctuation of USD against MYR, its realized forex gain/loss is only around RM 1M - 2M. I believe its natural hedging is properly implemented so far. Even during FY2024 (where USD weakens against MYR broadly), YSPSAH is still able to book in a realized forex gain of RM 1.6M (& unrealized loss of RM 9.2M).

For this Q42025, despite the forex loss, the net profit attributed to shareholders (accounting profit) stands at RM 7M, which is higher than the accounting profit reported in Q4 2024 (RM 6 M). On the whole year basis, however, the accounting profit for FY2025 is RM 25M, slightly lower than RM 27M made in FY2024. However, core profit (after adjusting forex loss, assuming the reported RM14M is unrealized forex loss) for FY 2025 is RM 39M (vs RM 35M in FY2024), which is commendable.

The operating cash flow (OCF) generated in FY 2025 is very strong, which is significantly higher than the accounting profit. Free cash flow in FY2025 comes at RM 54M-RM4M = RM 50M, which translate to FCF/share of RM0.35. It has ample cash to pay dividend from the internally generated cash flow obviously.

Concerning on its future expansion plan, I learn from the Management in AGM 2024 that they would build an advanced production line to boost up the capacity. They claimed that there is a problem in their old manufacturing line, leading to their inability to secure some local orders. As shown in the revenue breakdown below, local (and overall) sales experienced a slight drop indeed. This might indicate that the manufacturing plant could not take more capacity any longer, hence need further expansion.

From the cash flow statement (under Property, Plant and Equipment), I guess the number reported does not reflect the arrival of the new machinery yet. Still, the budget falls under capital commitment (Note A12 below). 

For valuation, core EPS comes at RM39M/142M shares = RM 0.27/share. Considering the closing price on 19/3/2026 (RM2.08), PER ~ 7.7. Personally, I found that it is very attractive. Plus, its dividend yield is > 5% with potential of further profit growth after the commissioning of the new production line.

Of course, Mr. Market would definitely abandon this counter as the USD is weakening nowadays (vs MYR). For a value investor like me, this would enable me to slowly accumulate the shares. Of course, this comes at certain opportunity cost. However, I am the kind of person that do not like to chase hot counter at high valuation. This kind of "boring" counter, instead, is my cup of tea.

The risk is rising energy cost (Iran war) and competition from bigger rival like DPHARMA in local market. It seems to me that DPHARMA is always the preferred supplier of government hospital. The Management told me that their competitiveness is their good service. Well, I am not sure how good service would translate to more sales lah... I am not familiar in pharma industry. Need more time to find out.