Kucingko Berhad (KUCINGKO), A Promising Start with Strong Cash Flow in Q3 FY24

Kucingko Berhad (BURSA: KUCINGKO), fresh off its ACE Market debut, has delivered its third-quarter results for FY2024, giving us a glimpse of its potential. The Group reported a revenue of RM8.72 million for the quarter, bringing the year-to-date figure to RM24.30 million. Almost all of this came from its bread-and-butter—2D animation services. North America was the star region, contributing a solid 64% of quarterly revenue at RM5.62 million.

Kucingko’s profit before tax (PBT) for the quarter stood at RM3.12 million, showing the business is running efficiently. However, profit after tax (PAT) dropped to RM1.81 million, mainly due to hefty IPO-related expenses that pushed the effective tax rate to 41.8%. For the year-to-date, the Group achieved RM6.06 million in PAT, translating to earnings per share (EPS) of 1.21 sen. Considering this is just its first few months as a listed company, the numbers show a solid foundation.

What’s impressive is the company’s ability to maintain strong cash flow despite the listing expenses. As of 30 September 2024, Kucingko’s cash and fixed deposits totaled a hefty RM44.68 million. This strength allowed the company to declare its first-ever dividend of 0.85 sen per share since its’ IPO, amounting to RM4.25 million. For a company this young on the public market, rewarding shareholders this early is a bold move that shows confidence.

Despite these achievements, Kucingko’s share price has slipped below its IPO price of RM0.30. This isn’t unusual for new listings, especially in a weak market. But for investors, this might be a golden opportunity to scoop up shares at a discount, given the company’s strong fundamentals and exciting growth plans.

Kucingko is playing in a booming space. The demand for digital content is surging, thanks to streaming platforms like Netflix, Disney+, and Amazon Prime. The Group isn’t stopping at 2D animation—it’s eyeing 3D and game animation as its next big moves. With part of its IPO proceeds earmarked for expanding production and setting up a U.S. sales office, Kucingko is gearing up to tap into bigger, higher-value contracts.

For investors, Kucingko offers a solid growth story. While the IPO-related costs hit profits this quarter, these are one-time expenses. The company’s ability to generate cash, pay dividends, and execute its plans speaks volumes about its potential. If you believe in the long-term growth of digital content, Kucingko is a name to watch. And with its current share price below the IPO level, this could be a chance to get in early.

Kucingko Berhad may be new to the public market, but it’s already showing why it’s a company worth keeping an eye on. Strong fundamentals, a clear growth plan, and a market that’s only getting bigger make this a stock to watch. If the company continues to execute its strategy, we might be looking at one of the ACE Market’s rising stars in the years to come.