Surging Pawn Demand Pushes Malaysia’s Two Listed Pawnshop Giants to Record Q3 Profits

KUALA LUMPUR, 25 Nov — Two pawnshop operators listed on Bursa Malaysia — Wellchip Group (WELLCHIP, 5325, Main Market Financial Services) and PPJ Pawnbroking (PPJACK, 0242, Main Market Financial Services) — reported their financial results for the third quarter of FY2025 yesterday, both achieving record-high quarterly net profits since listing.

Wellchip: Q3 net profit surges 170%

Wellchip Group’s net profit for the third quarter ended 30 September 2025 jumped 170% year-on-year to RM23.70 million, compared with RM8.76 million in the same period last year.
Revenue rose 47.73% to RM70.46 million, up from RM47.69 million a year ago.

For the first nine months of FY2025:

• Cumulative net profit: RM61.88 million (↑ 77%)
• Revenue: RM196.31 million (↑ 17.95%)

The group said the strong performance was mainly driven by increasing demand for pawn loans and higher gold prices.

Segment performance for the quarter:

• Pawn broking revenue: RM37.54 million (↑ 61.8%)
• Jewellery retail & trading: RM32.92 million (↑ 34.4%)

PPJ Pawnbroking: Q3 net profit rises 23.61% to RM8.06 million

PPJ Pawnbroking recorded a net profit of RM8.06 million for the third quarter, up 23.61% from RM6.52 million a year earlier.
Revenue increased 12.13% to RM32.65 million, compared with RM29.12 million previously.

The board also declared a third interim dividend of 0.5 sen per share, with the ex-date set for 9 December.

For the first nine months of FY2025:

• Cumulative net profit: RM21.35 million (↑ 19.90%)
• Revenue: RM99.31 million (↑ 11.61%)

Managing Director Lim Wen Hua said the strong quarterly performance reflects the resilience of its business model and sustained market demand for its pawn services.

He added that the group’s Q3 gross profit margin improved to 43.5%, underscoring better operational efficiency and an increasingly favourable business mix.

Pawn industry shows resilience in economic downturns

Pawn broking is widely regarded as a counter-cyclical and defensive industry.

• When economic conditions weaken, unemployment rises, or consumers face financial pressure → pawn demand typically increases, driving higher loan volumes and interest income.
• When the economy improves → borrowers regain ability to redeem pledged items, reducing unredeemed collateral and thus lowering auction income.

Gold price fluctuations also significantly influence profitability, given the high proportion of gold among pledged items:

• Higher gold prices → increase collateral value and auction margins
• Lower gold prices → compress profit margins and elevate valuation risks

Overall, stable cash flow and counter-cyclical demand have enabled both companies to deliver strong Q3 results despite economic uncertainty.