• ValueMax Group is Singapore's leading alternative financial services group, operating across four segments: pawnbroking, retail and trading of jewellery and gold, moneylending, and other operations. The Group operates a network of 48 combined pawnbroking and retail outlets, plus 2 standalone retail outlets in Singapore, and operates 32 outlets through its associated companies, providing exposure to the Malaysian market.
• ValueMax Group Limited (SGX: T6I) has launched a new 3-Year Senior Unsecured SGD bond offering under its newly updated S$300 million Multicurrency Medium Term Note Programme. The Initial Price Guidance (IPG) is set at ~4.25%. The notes carry a BB rating from Fitch Ratings and are scheduled to mature on 10 July 2029. Proceeds are expected to be used for general corporate purposes, including the refinancing of existing borrowings.
• Driven by growth across operational segments, ValueMax's FY2025 revenue grew 21.2% year-on-year (YoY) from S$456.2 million to S$553.1 million. Net profit attributable to shareholders rose from S$82.8 million to S$102.1 million, a 23.2% YoY growth. Gross profit margin expanded from 28.5% to 30.3%, reflecting stronger contributions from the higher margin pawnbroking segment.
• FY2025 PBT rose 26.2% YoY, while net profit attributable to shareholders rose 23.2% YoY. Furthermore, FY2024’s net profit had been lifted by a one-off S$10.1 million gain from the dilution of ValueMax’s stake in an associate, which did not recur in FY2025. Excluding this, net profit attributable to shareholders would have risen by 40.7% YoY instead, suggesting the Group’s core lending and retail businesses are generating more robust earnings than the headline figure alone suggests.On a segmental basis, retail and trading of jewellery and gold, which earns a margin on buying and selling, is the largest top-line contributor, with revenue exceeding S$425.0 million, around 76.8% of total revenue. The moneylending which earns interest income, mainly from secured property-backed loans, contributed S$67.3 million (12.2% of total revenue), while pawnbroking which also generates interest income from gold or jewellery that customers pledge as collateral for short-term loans earned S$60.8 million (11.0% of total revenue). In simple terms, ValueMax’s revenues are most influenced by retail and gold trading (which are in turn affected by gold prices), while its balance sheet is more exposed to moneylending.The pawnbroking portfolio operates at manageable LTV levels, and monitors these to both spot gold prices and retail cost prices. The moneylending book, averaging around S$1 million to S$2 million per loan, is predominantly secured by first-charge over Singapore residential properties at an internal LTV cap of 75%.
• Driven by higher trade receivables, inventories, and investments in associates, total assets grew from S$1.25 billion to S$1.56 billion in FY2025. Shareholder equity rose 18% YoY to S$611.8 million, supported by retained earnings and new share issuance from warrant exercises, while company-defined net debt stood at approximately S$900.9 million. This translates to a net debt-to-equity ratio of ~1.47x and an EBIT interest coverage (excluding interest accounted in cost of sales) of 14.9x, providing a reasonable cushion for bondholders despite the elevated leverage typical of lending-based business models.
• Net cash used in operating activities was S$166.7 million in FY2025, mainly due to working capital tied up in growing the pawnbroking and moneylending receivables book, as well as higher gold inventory. This was offset by net cash from financing activities of S$184.0 million, resulting in a net positive cashflow for the year. The operating cash outflow represents capital being deployed into interest-earning receivables rather than a sign of operational stress, though investors should monitor the Group's continued access to funding to sustain this growth model.
• A key risk to watch is gold price volatility. Rising gold prices increase the average pawn loan size customers can borrow against the same piece of jewellery, lift the resale value of unredeemed pledged items, and boost the value of the Group's own gold inventory (worth ~S$105 million). However, this cuts both ways. A sharp reversal in gold prices would compress collateral values, retail margins, and the carrying value of inventory simultaneously. Management stated that during previous stress tests (e.g. in 2013), pawnbroking default rates remained very manageable, increasing just slightly – borrowers are typically reluctant to abandon sentimental items like family jewellery (a theme mentioned by other pawnbroking issuers too).
• Looking at the new ValueMax 3-year bond, the 4.250% yield to worst appears fairly priced for a credit rated BB, supported by the Group's larger revenue scale, longer operating track record since 1988, and the added comfort that comes with a formal Fitch rating relative to its sector peers.
• That said, investors who are primarily chasing yield may find better value elsewhere in the pawnbroking space. Aspial Lifestyle's 5.100% notes due 2029 currently offer a 4.769% yield to worst, while MoneyMax Treasure's 5.000% notes due 2028 offer 4.540% - both representing a meaningful pickup over ValueMax, even though neither issuer carries a formal credit rating.
• On balance, we view ValueMax's new bond as fairly valued rather than a standout opportunity. Investors comfortable taking on the additional unrated credit risk in exchange for higher yield may find Aspial or MoneyMax the more attractive pick at current levels, while those who prioritise the certainty of a rated credit may still prefer to stay with ValueMax despite the lower yield on offer.
Disclosure: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a NIL position. The analyst who produced this report holds a NIL position in the abovementioned securities. This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.