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Singapore’s Big Loser for the Week

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Net Pacific Financial Holdings Ltd (SGX: 5QY) has dropped by 19% to S$0.039 on Thursday since last Friday’s close. With the Straits Times Index (SGX: ^STI) having gained 0.3% to 3,324 points in the same time, this makes Net Pacific a big loser in Singapore for the week.

The company provides financing services in China, Hong Kong, and Australia. Its business activities include the provision of mezzanine loans and investing into companies with “good fundamentals and growth potential”. Net Pacific also invests in short term financial instruments using the cash it has on hand.

Interestingly, the company’s shares have declined despite recently posting a great set of numbers. The firm announced its second quarter earnings on 13 August 2014 and saw revenue increase to HK$8.8 million from HK$5.9 million in the previous year. This was mainly due to higher interest income from the provision of mezzanine loans and investments. Net Pacific’s other income surged from just HK$31,000 a year ago to HK$4.4 million on the back of foreign exchange gains as the Australian Dollar appreciated against the Hong Kong Dollar. Mainly as a result of the growth in revenue and other income, the company’s net profit rose considerably to HK$8.3 million from HK$1.5 million a year ago.

As of 30 June 2014, Net Pacific had a cash hoard of HK$27.9 million without any borrowings.

Going forward, the firm believes China and Hong Kong will continue to present opportunities for its financing business, which is targeted at small and mid-sized companies. Having expanded into Australia last year, it expects the extension of new loans to customers in the country to go on this year.

The firm is currently trading at 0.8 times its trailing book value.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.