SME platform posts mixed results, but dividend payouts remain strong
Without margin trading support, a large segment of investors remains inactive in the SME market, creating liquidity constraints and limiting market depth as well as the overall investment appeal of the platform
Despite a challenging macroeconomic environment marked by political instability, economic slowdown, and persistent inflationary pressure, the Small and Medium Enterprises (SME) platform of the country's stock exchanges demonstrated mixed but resilient performances at the end of the 2024-25 fiscal year.
According to data from the Dhaka Stock Exchange (DSE), out of the 20 companies listed on the SME platform, 15 have so far published their annual financial statements for FY25. Of these, six companies reported higher profits compared to the previous year, eight saw a decline in profits, and one company incurred a loss.
Fourteen SME-listed companies declared dividends for FY25. In contrast, many companies listed on the main board failed to declare any dividends due to financial stress. As a result, the SME platform has maintained a comparatively stronger position in terms of dividend payouts.
Market insiders say that although SME companies operate on a smaller scale, their efficient business structures and cost management have helped them remain resilient during difficult times. Consequently, the SME platform has offered investors a degree of stability despite broader market pressures.
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Nialco Alloys, the first company listed on the Chittagong Stock Exchange's SME platform, posted a net profit of Tk6.90 crore in FY25, up from Tk5.01 crore in the previous fiscal year. The company's earnings per share (EPS) rose to Tk2.42 from Tk1.76 year-on-year. Reflecting this growth, Nialco Alloys declared a 10% cash dividend for its shareholders, compared to 6% in the previous year.
A manufacturer of copper alloy products, Nialco Alloys exports 100% of its output to Europe, Africa, and Asia. Japan remains one of its key markets, accounting for 56% of total exports in the last fiscal year. On Thursday, the company's share price on the DSE rose by 5.94% to Tk21.10.
Another SME-listed company, Himadri Limited, recorded an 11.40% increase in EPS in FY25. Its EPS stood at Tk3.81, up from Tk3.42 in the previous year. While the company announced a 5% cash dividend along with a proposed 100% stock dividend, the Bangladesh Securities and Exchange Commission (BSEC) rejected the stock dividend plan. The regulator raised concerns over intangible assets, tax liabilities, and capital reserves highlighted in the company's latest audited financial statements.
Incorporated in 1974, Himadri Limited is a subsidiary of the Ejab Group and primarily provides cold storage services for agro-based products, particularly potatoes, in northern Bangladesh. The company currently operates six potato cold storage facilities in Rangpur, Bogura, Joypurhat, Thakurgaon, Gaibandha, and Dinajpur.
Several other SME-listed companies, including MK Footwear, Mamun Agro, Master Feed, and Krishibid Seed, also achieved positive growth in FY25. Among them, MK Footwear posted the strongest performance, with EPS surging by 115% to Tk1.83 from Tk0.85 a year earlier. On Thursday, the company's share price stood at Tk55 on the DSE.
Meanwhile, Star Adhesives declared a higher dividend despite a decline in profits. For FY25, the company announced a total dividend of 62.5%, comprising 12.5% cash and 50% bonus shares. On Thursday, its share price climbed 9.33% to Tk106.60 on the DSE.
However, not all companies delivered strong results. Mostafa Metal Industries saw its profit plunge by 62.5% in FY25, with EPS dropping to Tk0.45 from Tk1.20 in the previous year. Similarly, Oriza Agro reported a 31.43% decline in EPS, while Web Coats posted a 29% drop in earnings.
No new companies have been listed on the SME platform since the July 2024 movement, resulting in prolonged stagnation. In addition, the absence of margin loan facilities has discouraged many investors from participating in SME shares. Market participants also point out that dividend payment practices of several SME companies are not sufficiently market-friendly, further dampening investor interest.
Without margin trading support, a large segment of investors remains inactive in the SME market, creating liquidity constraints and limiting market depth as well as the overall investment appeal of the platform.
Despite these challenges, investors remain hopeful that promising SME companies will raise funds from the capital market in the coming fiscal year, helping to revive momentum and restore confidence in the SME platform.
