Pico Far East Holdings Limited (Pico) is a leading global provider of integrated brand experience solutions. It has successfully built a balanced global footprint in the past decade. In FY25, the Asia-Pacific (excluding Greater China), EMEA, and the Americas regions contributed 26%, 24%, and 17% of total revenue, respectively.

A balanced global exposure - In the Asia-Pacific region, particularly Southeast Asia, is expected to see healthy growth over the next few years. This is driven by corporate shifting their focus due to US-China trade tensions and supportive Chinese policy initiatives like the Belt and Road, which is also fueling investment in the Middle East. The Group’s FY2025 revenue growth in Southeast Asia and the Middle East was a strong 19.9% and 23.7% YoY, respectively.

In the US, Pico competes in a specialized niche, delivering integrated brand experiences that blend physical activation with social media marketing and digital content. Its unique proposition fueled exceptional FY25 revenue growth of 47% YoY in the region.

Using AI to drive business - Pico distinguishes itself from traditional marketing firms through its deep commitment to digital transformation. It leverages data tools and its AI-embedded Pico PowerOne system to deliver customized client solutions, enhance targeting, and identify high-value client opportunities. Its integrated service model, which seamlessly incorporates social media strategy and execution, creates a significant competitive advantage.

Net cash position represents 42% of market cap - The company has been maintaining disciplined risk management, particularly on credit risk. Despite that its clients include governments and large corporations, it often faces with long payment cycles.  As such, Pico prioritizes financial stability and selects only reliable clients to work with. It had a net cash position of HK$1.53bn at of the end of October 2025 or about 52% of NAV. 

Solid FY25 results - The company delivered robust financial performance for the year ended 31 October 2025 (FY25).  It has demonstrated strong growth and operational execution with revenue gaining 13.9% YoY to HK$7.2bn. The core Brand Experience Activation segment remained the primary revenue driver, contributing 85% of the total. Gross profit rose 14.8% YoY to HK$2,230mn, with GPM holding steady at a healthy 30.9%. Operating profit saw strong growth of 18.5% YoY, reaching HK$592mn, underscoring the Group’s effective cost management and robust profitability.

Our view: Pico delivered a strong performance in FY25, characterized by industry-leading competitiveness and successful global expansion. Its revenue pipeline is underpinned by several high-value contracts, including projects for Saudi Entertainment Ventures (contract value: HK$763mn) and State Farm (contract value: HK$374mn. It has built a more balanced and resilient portfolio through investing heavily in the Middle East, making acquisitions in the US, and consolidating operations in Southeast Asia. This diversification provides multiple growth drivers and enhances its resilience against macro-economic fluctuation and the softer growth in Greater China. The Group is well-positioned for sustainable and profitable growth. The counter is trading at 8.3x FY26E P/E, with an expected yield of 5.05% and payout ratio of around 55% in the past two years. (Research Department)