Executive Summary / Key Takeaways

• Kheoba Corp. has executed a complete business model transformation, exiting its legacy tourism segment entirely and generating first-time profitability in Q3 2025 through ERP/CRM consultancy and software commission services targeting Asian SMEs.
• The company achieved a 67.5% operating margin and 53.9% net margin on $680,057 in nine-month revenue, demonstrating exceptional unit economics for a services business, though scale remains microscopic with heavy customer concentration risk.
• A controlling 74% stake acquisition by Mr. Tien Seng Tong in January 2025 provided both capital and Asian market access, establishing Singapore as the regional headquarters for what is now an asset-light, contractor-based delivery model.
• Despite operational success, KHOB faces critical going concern risks, ineffective internal controls, and an acknowledged need for additional capital, with management explicitly stating that sustaining profitability and securing financing are prerequisites for survival.
• Valuation at $2.50 per share reflects a 41.4x P/E and 22.3x P/S multiple, pricing in flawless execution of an ambitious Asian expansion that requires significant capital investment while competing against established regional software providers.

Setting the Scene: From Travel Tech to Enterprise Software

Kheoba Corp. commenced operations in 2021 as a tourism software provider in Europe, a strategy that generated minimal traction and ultimately failed. The nine months ended July 31, 2025, tell a radically different story: tourism revenue collapsed to zero from $25,115 in the prior year, while total revenue surged to $680,057 from $32,115. This 2,000% growth did not happen by accident. It resulted from a deliberate pivot toward Enterprise Resource Planning and Customer Relationship Management solutions for underserved Asian small and medium enterprises, backed by a controlling investor with regional networks.

The company now operates through an asset-light model, leveraging specialized contractors to deliver consultancy, software sales commissions, and proprietary software modules. Revenue recognition occurs only upon client confirmation, creating a conservative accounting profile that aligns revenue with successful delivery. Singapore subsidiary KHOB PTE. LTD. serves as the operational and administrative hub for Asia-Pacific expansion, while a Hong Kong entity remains dormant. This structure matters because it positions Kheoba to capture Asia's digital transformation wave without the overhead of traditional software development firms.

Business Model and Strategic Differentiation

Kheoba's four-segment structure reveals a focused strategy. The Consultancy Services segment, launched in 2025, generated $180,000 by providing implementation and customization services, including new Web3 offerings for decentralized applications and blockchain identity systems. The Commission for Software Sales segment produced $394,929 by acting as an agent for ERP/CRM developers, capturing net commissions upon delivery confirmation. The Software segment, selling proprietary modules, grew 1,400% to $105,128. The Tourism Programs segment's complete elimination demonstrates management's willingness to abandon failed initiatives.

The strategic differentiation lies in targeting Asian SMEs that face challenges securing customized software solutions. This focus on an underserved niche allows Kheoba to avoid direct competition with global enterprise software giants while building regional expertise. The July 2025 Web3 expansion aligns with growing business adoption of decentralized technologies for transparency and efficiency. However, the company lacks disclosed proprietary technology or R&D investments, suggesting differentiation stems primarily from market positioning and service delivery rather than technological moats.

Financial Performance: Profitability at Micro Scale

The nine-month financial results represent a genuine inflection point. Net income of $366,644 on $680,057 revenue yields a 53.9% net margin, while gross margin of 79.9% and operating margin of 67.5% reflect exceptional cost discipline for a services business. Cash from operations turned positive at $202,436 versus a $4,749 outflow in the prior year, and cash on hand increased dramatically to $96,380 from just $1,097. These metrics matter because they prove the pivot's viability.

Yet the scale remains critically small. $680,057 in nine-month revenue translates to an annual run rate below $1 million, and the largest customer represents 32% of total revenue, creating severe concentration risk. The company recognized $36,680 in debt forgiveness as equity, indicating prior financial distress. Management's explicit acknowledgment of going concern dependency, combined with a statement that "additional capital will be required to meet long-term operating requirements," signals that profitability alone cannot fund the envisioned Asian expansion.

Segment Dynamics and Growth Drivers

The segment performance tells a clear story of strategic rebirth. Consultancy and Commission segments, both non-existent in 2024, now represent $574,929 or 85% of nine-month revenue. This shift from product sales to services and agency models reduces capital intensity but increases reliance on contractor availability and quality control. The Software segment's 1,400% growth demonstrates residual value from the company's development capabilities, though its $105,128 contribution remains secondary.

Customer concentration presents the most immediate risk. A single client generating 32% of revenue means that loss would eliminate approximately $217,000 in nine-month revenue, which would significantly impact its annual run rate and potentially push the company back into losses. The Singapore subsidiary's tax situation adds another layer of uncertainty, as management reviews whether income was incorrectly taxed at the 21% U.S. federal rate rather than Singapore's 17% corporate rate, potentially overstating tax provisions and understating earnings.

Outlook, Execution Risk, and Capital Requirements

Management's guidance is notably cautious. They explicitly state that nine-month results "are not necessarily indicative of the results to be expected for the year ending October 31, 2025," and warn that "additional capital will be required" through equity or debt offerings. This matters because it frames the investment case around execution of a capital raise rather than organic growth alone. The company must scale from sub-$1 million revenue to a sustainable level while competing for capital in a crowded micro-cap landscape.

Internal controls were deemed ineffective as of July 31, 2025, creating compliance and reporting risks that could hinder capital raising efforts. The planned reincorporation from Nevada to the British Virgin Islands, approved July 29, 2025, suggests a move toward a more favorable corporate structure for international operations and potential tax optimization, but also adds legal complexity during a critical growth phase.

Competitive Context and Market Positioning

The competitive landscape for Asian SME software services differs materially from the tourism platforms described in outdated analyses. Kheoba faces regional systems integrators, local ERP resellers, and emerging Web3 consultancies rather than global travel giants. Its asset-light contractor model offers flexibility but limits control over delivery quality and timing. The Singapore hub provides geographic advantage, yet established competitors like SAP (SAP), Oracle (ORCL), and local Asian providers possess deeper resources and brand recognition.

The company's moat appears limited to regional focus and service bundling rather than proprietary technology. While Web3 capabilities differentiate the offering, the lack of disclosed R&D spending suggests these services rely on third-party platforms rather than internally developed IP. This creates vulnerability to larger competitors adding similar services or to clients bypassing Kheoba to work directly with contractors.

Valuation Context: Pricing Perfection at Micro Scale

At $2.50 per share, Kheoba trades at a $20.23 million market capitalization and $20.08 million enterprise value. The 41.4x P/E ratio reflects minimal earnings base rather than premium valuation, while the 22.3x P/S and 32.8x EV/EBITDA multiples price in aggressive growth expectations. For a company with $680,000 in nine-month revenue, these multiples signal that investors must believe in multi-year scaling to justify current pricing.

Balance sheet strength is minimal but improved. The 1.88 current ratio and 0.11 debt-to-equity ratio show no immediate liquidity crisis, yet $96,380 in cash provides over ten months of operating runway at current expense levels. The 171% ROE and 63% ROA reflect the small equity base and asset-light model rather than operational efficiency at scale. Comparisons to profitable software peers are challenging given Kheoba's stage; revenue multiples for early-stage SaaS companies typically range from 5x to 15x, making Kheoba's 22.3x multiple appear stretched unless growth accelerates dramatically.

Conclusion: A Credible Pivot at a Critical Juncture

Kheoba Corp. has successfully executed a strategic metamorphosis from a failed tourism software provider to a profitable ERP/CRM/Web3 services firm targeting Asian SMEs. The operational results—67.5% operating margins, positive cash flow, and complete segment replacement—demonstrate management's ability to pivot decisively. However, the investment case rests not on past performance but on the company's ability to scale from sub-$1 million revenue to a sustainable business while raising necessary capital and diversifying its customer base.

The thesis is both attractive and fragile. Attractive because the Asian SME software market remains underserved and Kheoba has established a regional footprint. Fragile because micro-scale operations, 32% customer concentration, ineffective internal controls, and acknowledged capital needs create multiple failure points. The valuation at $2.50 per share prices in flawless execution, leaving no margin for error. For investors, the critical variables are the timing and terms of the inevitable capital raise, the pace of customer diversification, and management's ability to maintain exceptional unit economics while scaling. If Kheoba can navigate these challenges, it may justify its premium multiple; if not, the stock risks significant dilution or worse.