$SASBADI / 5252 (SASBADI HOLDINGS BERHAD): The Highest Profit Ever 📚

Q2 consistently marks the peak of revenue and profit for $SASBADI / 5252 (SASBADI HOLDINGS BERHAD) throughout the fiscal year. This trend is attributed to the financial year's closure at the end of February, preceding the school opening in March, fostering heightened book sales. However, this fiscal year witnessed unprecedented achievements in both revenue and profit. Key updates are as follows:

1. Revenue soared to RM35.02 million, marking a substantial 10.55% year-on-year increase.
2. Print publishing remains the primary revenue driver, constituting approximately 93% of total revenue, albeit with a modest 6% increase compared to the previous year.
3. Digital solutions and ALP & STEM segments contribute 2% and 5% respectively. Notably, the ALP & STEM segment experienced a remarkable 531% surge compared to the previous year.
4. EBIT surged to RM10.05 million, an impressive 18.42% year-on-year increase.
5. Net profit reached RM7.01 million, reflecting a substantial 22.1% year-on-year increase.
6. The net profit margin expanded to 20.02%, surpassing the previous year's 18.13%.
7. The balance sheet reveals a cash position of RM11.74 million, with asset increases primarily attributed to higher account receivables. This increase is customary in this line of business, often accompanied by an anticipated decrease in the subsequent quarter.
8. Long-term borrowings totaled RM1.41 million, while short-term borrowings surged by 167.5% to RM19.85 million, exceeding the company's cash reserves. This warrants attention.
9. The company experienced a negative operating cash flow of RM8.93 million, attributable to the rise in account receivables, surpassing last year's figure.
10. A dividend of RM0.005 per share has been declared.
11. Management highlights this quarter as the second-highest quarterly net profit since IPO, attributing the surge to robust sales of academic publications for the 2024 academic year and increased demand for LEGO® Education STEM products, aligning with governmental efforts to promote STEM education among Malaysian students.
12. To sustain its leadership in the Malaysian education sector, the company pledges to intensify digitalization efforts, focus on STEM & ALP segments, ramp up marketing endeavors for LEGO® Education STEM products, and pursue mergers and acquisitions for inorganic growth.
13. While the emphasis on digitalization and STEM products appears promising, the company remains subject to seasonal fluctuations, with at least one quarter experiencing losses, occasionally extending to two quarters.