ValueMax Group Limited

Income statement

Reported figures come from AR2024 and AR2025 five-year highlights, audited income statements, and The Edge Singapore results reports for FY2021–FY2022.

Notes:

Gross profit FY2021: derived as 1H2021 (S$36.4m, back-calculated from the reported +16.7% growth to S$42.5m in 1H2022) plus 2H2021 (S$38.7m).

Gross profit FY2022: derived from the reported 22.0% FY2023 growth to S$100.2m.

Operating profit (analyst): PBT + finance costs shown below gross profit − share of associates − one-off dilution gain.

EBITDA (analyst): PBT + total interest expense + depreciation of PPE and right-of-use assets (S$7.5m in FY2024; S$8.1m in FY2025).

Interest presentation: ValueMax books interest on loans that fund its pawn and moneylending books within cost of sales (S$28.1m of S$34.7m in FY2023, per SIAS response). The P&L "finance costs" line is therefore understated relative to true funding cost.

FY2021 net profit: reported as S$41.3m (The Edge Singapore, Feb 2022) but cited as S$41.5m in The Edge's FY2022 report. S$41.3m is used here.

Per-share data (cents)

FY2021–FY2024 dividends are final dividends only; no interim dividend was identified for those years. FY2025 comprises a 1.20-cent interim and a 2.68-cent final. One table in the FY2025 interim FS dividend note shows a proposed final of 2.06 cents (S$19.4m). The same document's dividend section, the press release and AR2025 all state 2.68 cents, and S$25.4m was paid in 1H2026 at 2.68 cents. The 2.06-cent figure is treated as a drafting error.

Margins and growth (%)

Compound growth FY2021–FY2025 (analyst-calculated): revenue CAGR 19.0%; attributable net profit CAGR 25.4%; NAV CAGR 16.9% (S$327.4m to S$611.8m).

Balance sheet

Notes:

• FY2023 receivables, inventories and cash are derived from FY2024 movements disclosed in AR2024. FY2021 borrowings are derived from FY2022's S$610.5m less the S$167.9m increase cited in the SGX query response.

• FY2022 cash is not shown because sources conflict: The Edge reported S$14.5m of cash and cash equivalents, while the SGX query referenced S$6.3m.

1H2026 balance sheet (30 Jun 2026): total assets S$1,761.1m; receivables S$1,455.6m; inventories S$157.3m; cash S$18.8m; borrowings S$1,046.5m (S$964.0m current, S$82.4m non-current); total equity S$651.6m; NAV per share 68.13 cents.

Cash flow

FY2021–FY2023 OCF and capex use TipRanks aggregates, except FY2022 OCF which comes from the SGX query response. FY2024–FY2025 come from filings. Treasury shares of 100,000 have remained unchanged, and no buyback authority has been used.

1H2026: operating cash flow before working capital S$91.0m; net OCF −S$33.8m; capex S$0.2m; S$2.6m outflow on the Indonesian associate; net borrowings +S$54.4m; dividends to owners S$25.4m.

Key ratios (analyst-calculated from filings)

A conventional cash conversion cycle is not meaningful for a balance-sheet lender, so inventory days are shown instead. At 30 Jun 2026, debt to equity was 1.61x, and Beansprout reports net debt to total capital of 61.0%.

Commentary on trends, inflections and drivers

Revenue. Growth was modest in FY2021–FY2022 (+4.2% in FY2022) because retail and trading revenue was flat. It accelerated sharply from FY2023 (+15.3%) through FY2024 (+37.8%) and FY2025 (+21.3%), with 1H2026 at +38.2%. The inflection coincides with the gold bull market. Retail and trading turnover is almost mechanically linked to gold prices and trade volumes: it added S$116.7m in FY2024, S$81.2m in FY2025 and S$85.1m in 1H2026. Interest-bearing revenue grew more steadily, with pawnbroking up S$6.2m, S$11.9m and S$12.0m (1H) and moneylending up S$2.3m, S$3.8m and S$5.3m (1H) over the same periods.

Margins. Gross margin oscillates with mix: higher retail weighting lowers it, as in FY2024 (28.5%) and 1H2026 (27.0%). Pre-tax margin, however, has risen every year from 18.0% to 22.3%. Three drivers stand out:

• Operating leverage: administrative expenses grew 16.5% in FY2025, below gross profit growth of 29.1%.

• Falling funding costs: total interest expense fell from S$34.7m (FY2023) to S$29.6m (FY2025) even as borrowings rose 44%, reflecting the decline in Singapore benchmark rates.

• Associates: their contribution nearly doubled to S$11.6m in FY2025.

The FY2024 figure was flattered by the S$10.1m Well Chip dilution gain. Excluding it, PBT grew 40.9% in FY2025.

Earnings quality. Two items are non-cash or market-dependent:

Inventory fair-value gains: (S$10.0m in FY2025) form part of retail and trading profit and reverse when gold falls, as happened in 1H2026 (−S$1.5m).

Expected credit loss allowances: rose from S$2.6m to S$4.2m in FY2025, with S$3.7m in moneylending, and to S$1.9m in 1H2026. These remain small against a S$1.27bn book (about 0.33% of receivables).

Balance sheet and cash flow. Persistent negative operating cash flow is structural. Loan disbursements run through working capital: receivables rose S$252.1m in FY2025 and S$192.7m in 1H2026. Growth is therefore funded by short-term bank lines, commercial paper and, since July 2026, a three-year bond. Before working-capital investment, the business generated S$145.1m in FY2025, which covered dividends about four times. The structural vulnerability is maturity mismatch: 92% of borrowings were current at 30 Jun 2026, although pawn loans themselves are short-dated. Leverage has risen back to 1.61x debt to equity at 1H2026, but has stayed within the 1.3–1.7x band of the past five years. Equity has also been supplemented by S$49.1m of warrant proceeds over FY2024–FY2025.

Returns. ROE improved from about 13% (FY2022–FY2023) to about 18% (FY2025). Annualised 1H2026 attributable profit (S$125m) on average equity of about S$625m implies roughly 20%. These are attractive returns for a secured lender running only 1.4–1.6x gearing.

1H2026 interim snapshot (S$m; source: 1H2026 condensed interim FS)

Management guidance

No numeric guidance is given. The August 2026 outlook stated that:

• gold may remain volatile after peaking at about US$5,300/oz in March 2026 and easing to about US$4,100 in early August;

• the environment is challenging with increased competition;

• the group will keep pursuing acquisitions, new locations and moneylending growth;

• the Indonesian associate will not materially affect FY2026 results.

Consensus expectations

No robust consensus exists. For reference, a run-rate based on 1H2026 implies FY2026 attributable profit of S$115–125m if 2H2026 matches 1H2026. That would be +13% to +22% year on year. This is an analyst estimate, not consensus.

Bull case

1. Structural ROE uplift. ROE has risen from about 13% (FY2022–FY2023) to about 18% (FY2025), and roughly 20% annualised in 1H2026. This was achieved at stable 1.3–1.6x gearing, supported by falling funding costs (interest expense down two years running while debt rose 44%) and a high-margin moneylending book (53.5% segment margin).

2. Undemanding valuation for a compounding lender. About 7.8x trailing P/E and 1.4x book for a 25% EPS CAGR franchise, with index inclusion (iEdge Next 50), a first credit rating and float expansion potentially broadening the shareholder base from about 0.55% institutional.

3. Regional growth through capital-light associates. Malaysia (share of results +85% in FY2025) and Indonesia (PT Gadai financing reportedly tripled year on year) add growth without consolidating credit risk on ValueMax's balance sheet.

Bear case

1. Gold mean-reversion. Much of FY2024–FY2025 growth was gold-driven (retail and trading revenue +S$198m over two years; inventory fair-value gains of S$10m in FY2025). Gold already fell about 23% from its March 2026 peak to early August, and 1H2026 gross margin fell to 27.0% with an inventory fair-value loss.

2. Funding fragility. Operating cash flow is persistently negative (−S$166.7m in FY2025), and 92% of S$1.05bn of debt is current. A credit or rate shock would collide with refinancing needs, and Fitch's BB is sub-investment grade.

3. Governance discount. Founder-family control (deemed interest of about 85%), family members in Chairman, CEO and CCRO roles, sizeable executive pay (S$7.9m across three executive directors in FY2025, up 44%), recurring family IPTs, and a Lead Independent Director outside the NC may cap the multiple regardless of earnings.

Key catalysts and monitorables (next 12 months)

Gold price trajectory: against 2H2026 inventory valuation and pawn quantum. Monitor the FY2026 results, expected around late February 2027.

Credit costs: in unsecured and SME moneylending (ECL run-rate above S$4m a year would signal deterioration).

Funding mix: further MTN tranches to term out short-term debt; commercial-paper pricing.

Acquisition activity: in Singapore and regional associate expansion (Well Chip outlet growth; PT Gadai performance).

Post-warrant share count, free-float durability: and continued index membership.

FY2026 dividend: whether total DPS exceeds 3.88 cents (the interim is already up 15%).

Fitch review: and any rating-outlook change.

Climate-disclosure upgrades: under SGX's ISSB-aligned regime.

Analyst verdict

ValueMax has changed in five years from a gold-sensitive pawnshop chain into a diversified secured lender. On the current cycle, it earns the best margins and among the best returns in Singapore's listed pawnbroking peer group. The evidence is in the filings. Attributable profit has compounded at about 25% a year since FY2021, pre-tax margin has widened every year to 22.3%, and ROE has climbed toward 20% without a material increase in leverage. The quality of the earnings mix is better than headline revenue suggests: interest-bearing segments and associates produced about 60% of FY2025 pre-tax profit, and the moneylending franchise gives ValueMax collateral diversity that its peers lack.

The investment debate centres on durability, not quality. A meaningful share of the last two years' growth came from an exceptional gold rally. That rally has partially reversed, and 1H2026 already showed a compression in gross margin and a swing to inventory fair-value losses. The balance sheet is sound in leverage terms but structurally reliant on short-term funding, which the debut Fitch rating and 2029 bond only begin to address. Governance remains the most persistent valuation constraint: control is highly concentrated, family members occupy the top executive roles, and related-party trading recurs, even though disclosure is thorough and audit outcomes are clean.

At about 8x trailing earnings and 1.4x book, with a dividend yield of around 4%, the market appears to price ValueMax for a gold normalisation rather than for continued compounding. If gold stabilises at elevated levels and credit costs remain contained, the moneylending engine and regional associates offer a credible path to further growth, and the stock looks inexpensive relative to its return profile. If gold retraces sharply while competition intensifies, earnings could fall back toward FY2024 levels. The variables to watch most closely are credit costs, funding terms and the gold price.