⚡ Flash Summary

SG Allied Businesses Limited’s annual report for the year ended June 30, 2025, reveals a company in transition, shifting from manufacturing to hi-tech agriculture. The company experienced a healthy 30.67% overall revenue growth, driven by hydroponic vertical farm products (+55%), cold storage (+16.7%), and warehouse operations (+18%). Despite the revenue increase, the company reported a net loss of PKR 15.169 million, mainly due to depreciation expenses on underutilized mushroom facilities. The board is focused on expanding production and improving yields to achieve profitability.

📌 Key Takeaways

• 📈 Overall revenue increased by 30.67% to PKR 183.26 million from PKR 140.25 million.
• 🌱 Revenue from Hydroponic Vertical Farm Products surged by 55% to PKR 74.68 million.
• 🧊 Cold Store revenue grew by 16.7% to PKR 10.54 million.
• 📦 Warehouse revenue increased by 18% to PKR 98.05 million.
• 🍄 The company successfully launched mushroom production after a trial.
• 🏢 Six additional hydroponic rooms began production in December 2023, expected to boost revenues.
• 📉 Net loss was PKR 15.17 million, a slight improvement from PKR 16.14 million last year.
• ⚠️ Accumulated losses stand at PKR 791.38 million.
• 🌱 Cost of sales increased substantially to PKR 56.72 million due to special moss and raw materials for mushrooms.
• 🏢 Rental income increased to PKR 98.05 million.
• 🌱 Company is gaining experience in hydroponically grown white button mushroom production.
• 🔬 Company faced technological hurdles in mushroom production, hiring foreign consultants.
• 🌱 Expansion is underway to increase the production of value-added vegetables.
• 🧑‍💼 Board diligently reviewed and approved business strategies, corporate objectives, and financial statements.

🎯 Investment Thesis

A HOLD recommendation is appropriate for SG Allied Businesses Limited. While the company demonstrates strong revenue growth potential from its new agricultural ventures, current losses and liquidity constraints present significant challenges. A positive shift in profitability is needed. Until then, the stock’s upside is limited. The price target is dependent on improved efficiencies and substantial earnings growth.