Hong Leong Asia (HLA) has reported a 13% year-on-year increase in profit after tax and minority interest (PATMI) for the first half of 2025, reaching S$56m. This growth was primarily driven by a 30% surge in diesel engine sales from its subsidiary, China Yuchai, which capitalised on strong demand from data centres and the broader Chinese market. Despite a temporary dip in its building materials segment, HLA remains optimistic about a recovery in the latter half of the year.
The company’s revenue for H1 2025 rose by 26% to S$2.83b, with the powertrain solutions segment leading the charge. China Yuchai’s diesel engine shipments increased by nearly 30% year-on-year, contributing to a 56% rise in net profit for the segment. The building materials division, however, faced challenges due to lease expirations in Malaysia, impacting production and sales. Nevertheless, HLA anticipates improved performance in the second half of 2025, supported by ongoing construction projects in Singapore.
HLA’s financial health remains robust, with net cash growing to S$749m by the end of June 2025. The company also declared an interim dividend of S$0.02 per share, double the amount from the previous year. Analysts have upgraded earnings forecasts for 2025-2027 by up to 16%, reflecting confidence in HLA’s growth trajectory.
Looking ahead, HLA’s valuation appears attractive, with a target price of S$2.63, up from S$1.93. The company’s strong cash flow and potential for higher dividends further bolster its investment appeal.
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