When Cash Outweighs the Cap: This Company’s Curious Valuation Gap

Several Singaporean investors were recently holidaying in Changsha city in the Chinese province of Hunan when they knocked on the door of a Singapore listco to catch up on the company's business.

That company is Anchun International, a chemical engineering solutions company you've likely not heard of, despite it having been listed on the Singapore Exchange since 2010.

We came away impressed with Anchun's business after speaking with management and checking out its manufacturing facilities.

plant tour2025 From system design to production and project management, Anchun provides Integrated Chemical Systems Engineering and Technology Solutions for clients in China and overseas.

model plant2025 With a wide portfolio of patents, Anchun produces catalysts for processes like ammonia and methanol synthesis, manufactures chemical equipment like reactors and pressure vessels, and offers engineering design services for ammonia and methanol production, which are used in things like fertilizers and biofuels.

The trip, sandwiched between tastings of Hunan’s famously spicy fare (including the “stinky tofu”) made popular in Singapore by Xiang Xiang Hunan Restaurant, offered insights into a business that seems to be scaling up and diversifying its client industries.

xiangxiang food Golden Broth Sour and Spicy Fish -- this is a signature dish from Hunan and is available at Xiang Xiang restaurant in Singapore. Changsha is also known for high-tech vibes with innovations like its cutting-edge robotics and smart manufacturing hubs.

For example, Changsha is one of the first cities in China to test driverless taxis and buses, leveraging 5G networks for real-time connectivity.

Anchun has just reported some decent numbers for 1HFY2025.

Metrics (RMB million, unless stated)	FY2023	FY2024	1HFY2025
Revenue	133.6	177.4	71.6
Gross Profit (Margin %)	30.7 (23.0%)	41.2 (23.2%)	16.8 (23.5%)
Net Profit Attributable to Owners	2.4	10.9	4.7
EPS (RMB cents)	5.06	23.43	9.93

Putting this in perspective, it's riding the wave from FY2024, where full-year sales jumped 33% to RMB177.4 million after FY2023's dip to RMB133.6 million (down 27% from FY2022's RMB182.8 million).

Back in FY2023, things were rough with supply chain hiccups post-COVID and weak demand.

Anchun achieved strong 1H2025 contract wins amounting to RMB 121 million, which is a very strong half considering their revenue track record.

Anchun said it has RMB179.3 million worth of backlog (up from FY2024's RMB130.0 million) to be recognised as follows:

FY2025 (second half): RMB58.55 million.
FY2026: RMB120.76 million.

Cash, lots of it

Anchun's eye-catching feature is its cash per share (with zero debt) exceeding its stock price (39 SGD cents) by a wide margin.

chart8.25

Anchun's net cash stash of RMB163.6 million (about SGD29.1 million at today's rates) is bigger than its market cap of SGD18.3 million as of August 12, 2025.

That means the market's slapping a negative tag on the actual business.

Unfortunately, it's nothing new -- its net cash has exceeded its market cap for many years, although the stock has slowly re-rated (see chart above). It's up 20% year-to-date (from 32.5 cents to 39 cents).

Per share (SGD cents)	FY2023	FY2024	1HFY2025
Net Cash	70.6	77.7	64.5
Net Asset Value	118.1	122.3	122.0
Dividend	--	2.15	--

This cashpile has opened doors for juicy dividends (irregular), buybacks, and raised the possibility of going private.

On the flip side, the stock's super illiquid – in the past 3 months, average daily trades around 11,000 shares (worth ~SGD4,300).

Why? It's a tiny cap, not much love from big funds, and that niche China chemical focus is not familiar ground for Singapore investors.

Bottom line

Anchun's trading at a trailing P/E of about 9x (on FY2024 EPS of 4.2 SGD cents) but, as mentioned above, its cash of 64.5 SGD cents/share means its profitable business has been accorded zero value -- in fact, it has been given a negative value.

All in all, 1HFY2025 keeps the rebound going from FY2023's slump.

This could sound alluring, just as are Changsha's spicy delights.

Anchun is a little-followed microcap — cash-rich, profitable, and with a growing order book — hiding in plain sight on the SGX.

For more, see Q&A between SIAS and Anchun ahead of the FY2024 AGM here.

When Cash Outweighs the Cap: This Company’s Curious Valuation Gap

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