Company Update: 6 April 2026
Stickier than any adhesive
- Business model stickier than any adhesive. Infinity supplies consumable adhesives, primers and hardeners embedded in footwear production lines. Products must pass a dual-approval process by both global brands and OEMs, creating long qualification cycles, high switching costs and entrenched supplier mandates once approved.
FY25 Snapshot
For the full-year, revenue and net profit were HK$835mn and HK$122mn respectively. The company’s revenue has remained stable across cycles, reflecting production-linked demand rather than discretionary retail. Majority of Infinity’s revenue (88%) comes from ASEAN, with 59% Vietnam, 15% Indonesia, 12% Bangladesh, 1% India. The remaining 12% comes from China. Its balance sheet proves stable with net cash of HK$288.5mn and cash ~35% of total assets; with only lease-related liabilities outstanding. For FY25, the company declared total dividends amounting to HK$0.205 per share, an increase from the HK$0.18 per share in FY24.
Structural Industry Tailwinds, Though Near-Term Macro Conditions Have Softened
The global footwear market is projected to grow from US$495bn in 2025 to approximately US$790bn by 2032, driven by emerging market consumption, sportswear penetration and lifestyle shifts. Rising labour costs, tariffs and supply-chain diversification continue to shift production from China into Vietnam and Indonesia, benefiting regionally embedded suppliers such as Infinity. Still, the ongoing Middle East conflict has raised near-term energy, freight and input costs, which may moderate factory activity across Asia even as the longer-term relocation trend remains intact.
Valuation & Action
Based on our discounted cash flow (DCF) valuation, we initiate coverage on Infinity Development Holdings with an OUTPERFORM rating and a target price of S$0.62. Our DCF-based valuation utilises employs a WACC of 8.03% and a blended terminal value approach, derived based on a 1.5% terminal growth rate and a forward P/E multiple of 4.3x, reflecting a conservative risk assessment amid heightened macro uncertainty and near-term cost pressure across Asia.
Risks
Customer concentration, OEM footwear production cyclicality, volatile raw material costs, currency and macroeconomic risks and Indonesia expansion execution.
