XMH Holdings Ltd
Back with another stock listed in Singapore! Not normally am I excited about financial companies given the risk of inflation and higher interest rates, but I believe you’ll be excited about these numbers. This company is essentially a private family business, trading publicly, offering a great product.
Company
XMH Holdings Ltd is an investment holding company ($BQF). Along with its subsidiaries, the firm is predominantly engaged as a diesel engine, propulsion, and power generating solutions provider to customers in the marine and industrial sectors across Asia. Its reportable segments are; Distribution, After-sales, and Project. The maximum revenue is generated from its Distribution segment which comprises distribution of propulsion engines. The After-sales segment relates to after-sales services provided which includes services/jobs, sales of spare parts, and other trading; and the Project segment relates to manufacturing, sales, and commission of power generator sets and the manufacturing of marine equipment and related repair services. Geographically, it derives key revenue from Indonesia.
| Shares Out | 109.64M |
Their customer bases are divided up to Singapore, Indonesia, Malaysia, Vietnam, and internationally.
Two Companies Within
XIN MING HUA– XMH is a reputable and trusted name as a diesel engine, propulsion and power generating solutions provider to a diverse customer base in the marine and industrial sectors across Asia. They’ve been operating for over 60 years.
Their distributorship, agency and dealership rights from prominent names such as Mitsubishi, Akasaka and Kamome (Japan), D-I (South Korea), SOLÉ, Reintjes, CENTA (Europe) and Siemens (Germany).
MECH-POWER GENERATOR–manufacturer in design, assembly, testing, installation, commissioning, sale and service of diesel powered generator sets in Singapore. MPG also supplies the power generation industry in the Asia Pacific region.
Industry
Electrical Components & Equipment (NEC)
Ratios
| Current | Vs Industry |
|---|---|
| PE Ratio | 6.72 |
| PE Ratio without NRI | 7.02 |
| Shiller PE Ratio | 50.14 |
| Price-to-Owner-Earnings | 26.72 |
| PS Ratio | 1.04 |
| PB Ratio | 2.09 |
| Price-to-Tangible-Book | 2.84 |
Return On Investment (TTM) 32.37
Return On Equity (TTM)14.62
Margin
| Dividend | 0.08 (4.85%) |
Interesting
The first thing that caught my eye has been these:
| Market Cap | 110.74M USD |
| Enterprise Value | 111.41M USD |
- It’s P/E is half the rest of the Singaporean Market and earnings grew over 100% over the last year
- They amazingly have a 10 year track record of supplying diesel generators to blue chip data centre clients–> could this come at any better time?
In fact they are playing to this tune: The strategic focus on the data centre segment delivered results, with the project segment securing several key contracts that significantly boosted revenue.The group’s order book reached approximately $190.6 million as at 18 July 2025, up from $127.5 million a year earlier and $124.4 million in 2023.
…growth trajectory in diesel engine/generators and Singapore construction (particularly cycling paths)
We are in the perfect time for a period of growth. This is its last quarter:
| (SGD) | Apr 2025 | Y/Y |
|---|---|---|
| Revenue | 50.12M | 88.6% |
| Net income | 6.47M | 113.06% |
| Diluted EPS | 0.06 | 100% |
| Net profit margin | 12.91% | 12.95% |
Balance Sheet (all tremendous increase in numbers the last 5 years) (SGD $M)
Cash and Short Term Investments: 33.95
Total Current Assets: 151.32
Accounts Receivable: 37.03
Total Assets: 203.39
Accounts Payable: 81.64
Total Current Liabilities: 119.1
Short-Term Debt: 29.34
Long-Term Debt: 2.4
Total Debt: 32.6
Net Cash: 1.26 (it is positive for the first time since it went public).
Total assets cover total liabilities and cash alone covers all of the short term debt. In fact, this is true for the last 5 years (I am trying to hammer home the point that these other markets are far more fiscally conservative!). Most of the liabilities are current liabilities–and if we zoom in on those, you can see ~75% those are accounts payable. Okay, cost of doing business… to get the margins they have below:
Performance
| Gross Margin | 32.61 |
| Operating Margin % | 16.69 |
| Net Margin % | 15.28 |
| EBITDA Margin % | 20.77 |
| FCF Margin % | 6.9 |
| ROE % | 37.09 |
| ROA % | 14.97 |
| ROIC % | 25.14 |
| Revenue | 167.123 |
| EPS | 0.233 |
| Beta | 1.53 |
Dividend
Nothing but Net
Notice how little the shareholders have been diluted during this expansion in net income.
Ownerships
Tam has been appointed as the chairman and managing director in 1991–you think he’s sick of his role or not?
For the fiscal year ended 30 April 2025, XMH Holdings Ltd revenues increased 35% to SP$167.1M. Net income increased from SP$12.6M to SP$25.5M. Revenues reflect an increase in demand for the Company’s products and services due to favorable market conditions. Net income benefited from Impairment of Financial Investments decrease from SP$1.6M (expense) to SP$1.4M (income).
Expecting More Growth Ahead
From a recent report (follow up of questions from their Q2 results release)
“For FY2025, the growth in our data centre business mainly came from Malaysia. Looking ahead, the expansion of cloud computing, AI applications, and e-commerce is driving sustained demand for new facilities across Southeast Asia. Countries such as Indonesia, the Philippines and Thailand, are also actively developing their digital infrastructure to attract global hyperscalers, creating recurring opportunities for us throughout the region”
News
Oct 27 (Reuters) – XMH Holdings Ltd :
* XMH HOLDINGS LTD. RESIGNATION OF CHIEF FINANCIAL OFFICER
* TAN LEONG KIM RESIGNS AS CFO
He is going to continue with his own personal interests and there are no remaining unresolved differences left.
Something to Watch
…With higher revenue from Indonesia and Malaysia, risks such as customers/supplierconcentration and collectability of receivables become even more prevalent. Risks inherently associated with these countries may also be magnified. However, these risks are not new. Management remains cognizant of such risks and are constantly keeping a closer watch on local regulatory compliance, supply chain resilience, and credit risk…
Its also trading around it’s 2013 highs, perhaps for some good reasons given their jumps in revenues, but a correction could be in the works in the short-term.
What you’re Buying
- This is a company that is focused on a Southeast Asia market play
- It is a company with steady (rather ordinary) margins and confidence from the management team
- It is also a play on the increasing importance of data centers & cloud computing, energy security concerns & digitization of SEA for e-commerce
The company appears significantly undervalued relative to both its quality metrics and growth runway in Johor’s explosive data centre buildout.
Closing
This is an interesting company I believe that doesn’t do anything too flashy, but stands to continue growth not only in their sector but by being in Southeast Asia.
If we’re considering that data centers, e-commerce and cloud computing will remain in demand, even perhaps once the Nvidia scam crashes, than we may be offered an undervalued relative opportunity to play this angle.
This is another type of company that is going missed by the fact that it’s listed in external markets and does not focus a great deal on marketing efforts, but I believe this a great business in the right time to own. Would I put everything on this? No. But it deserves a small % of your portfolio as a diversifier, AI/chip play, and future dividend payer once debt is paid down further and cash reserves grow.
