Infinity
Development (HKEX: 640 | SGX: ZBA) is dual-listed on the Hong Kong and
Singapore stock exchanges. The group operates in a specialized segment of the
chemicals industry — supplying high-performance adhesives, primers and related
products primarily to the global footwear manufacturing sector.
Unlike broad-based commodity chemical producers, Infinity focuses on technically demanding, service-intensive applications. This niche positioning supports structurally higher margins and deeper customer relationships.
Business
Model & Competitive Positioning
Infinity serves
approximately 200 footwear manufacturers, including suppliers to major global
brands such as Nike, Adidas, and Puma. Its products are
embedded in customers’ production processes, which creates operational
stickiness and high switching costs.
Several
customer relationships have spanned more than 30 years — a testament to product
reliability, technical support, and consistent performance.
Importantly, Infinity Dev is investing in next-generation, water-based and low-VOC adhesive solutions. As global footwear brands emphasize sustainability and ESG compliance, environmentally friendly adhesives are becoming increasingly critical. This strategic R&D focus positions the company to capture higher-value demand over time.
Solid
Financial Metrics
Based on the
last traded price of S$0.42 (13 February 2026):
- TTM P/E: 5.83x
- FY2025 ROE: 20.17%
- Gross Margin: 37.94%
- Net Margin: 14.63%
- Dividend Yield: 7.40%
- Payout Ratio: ~50%
For a specialty
industrial business, a 20% ROE combined with high-30% gross margins signals
strong pricing power and operational discipline.
Revenue grew
13.4% year-on-year, while EPS surged 143%. Such divergence suggests meaningful
margin expansion and/or normalization of prior cost pressures — an encouraging
indicator of operating leverage.
At under 6x earnings, the valuation appears undemanding relative to profitability and return metrics.
Balance
Sheet Strength
Infinity
maintains a conservative capital structure:
- Current ratio above 3
- Very low debt levels
- Positive operating and free cash flow
- Substantial net cash position
This financial flexibility allows the company to fund expansion, capex, and strategic growth initiatives without heavy leverage or equity dilution risk.
Industry
Tailwinds
Asia remains
the global hub for footwear manufacturing and exports. As production scales in
emerging markets, demand for specialized adhesives rises in tandem.
Additionally,
ESG-driven procurement standards favor higher-value, environmentally compliant
adhesives — precisely the segment Infinity is developing.
These structural trends provide medium-term demand visibility.
Recent
Developments
Infinity
recently completed a dual primary listing on both Hong Kong Stock Exchange and Singapore
Exchange, raising approximately S$13.7 million via placement.
This move
broadens its investor base, improves trading liquidity, and provides capital to
support regional expansion.
Management is
expanding manufacturing capacity and strengthening its presence in Indonesia
and India. Establishing local production reduces logistics friction and
positions the company closer to high-growth footwear clusters.
Sales contribution from India has historically been small, but this is expected to scale meaningfully as new facilities come online.
Investment
Thesis
Infinity
combines:
- Undemanding valuation (sub-6x P/E)
- Strong ROE and margin profile
- Healthy balance sheet and cash flow
- Attractive 7%+ dividend yield
- Structural niche positioning with customer
stickiness
- ESG-aligned product roadmap
- Regional expansion optionality
Given its
earnings momentum and expansion plans, a re-rating toward a more normalized
multiple appears plausible.
At my target
price of S$0.84, the stock offers approximately 100% upside potential
within 12 months, supported by both earnings growth and multiple expansion.
Prescientsuper
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