We Think Reliance Global Holdings (HKG:723) Can Afford To Drive Business Growth

Even when a business is losing money, it's possible for shareholders to make money if they buy a good business at the right price. For example, although Amazon.com made losses for many years after listing, if you had bought and held the shares since 1999, you would have made a fortune. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.

So should Reliance Global Holdings (HKG:723) shareholders be worried about its cash burn? In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. Let's start with an examination of the business' cash, relative to its cash burn.

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When Might Reliance Global Holdings Run Out Of Money?

You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. When Reliance Global Holdings last reported its September 2025 balance sheet in December 2025, it had zero debt and cash worth HK$101m. Importantly, its cash burn was HK$21m over the trailing twelve months. So it had a cash runway of about 4.9 years from September 2025. There's no doubt that this is a reassuringly long runway. You can see how its cash balance has changed over time in the image below.

View our latest analysis for Reliance Global Holdings

Is Reliance Global Holdings' Revenue Growing?

We're hesitant to extrapolate on the recent trend to assess its cash burn, because Reliance Global Holdings actually had positive free cash flow last year, so operating revenue growth is probably our best bet to measure, right now. The grim reality for shareholders is that operating revenue fell by 63% over the last twelve months, which is not what we want to see in a cash burning company. In reality, this article only makes a short study of the company's growth data. You can take a look at how Reliance Global Holdings has developed its business over time by checking this visualization of its revenue and earnings history.

Can Reliance Global Holdings Raise More Cash Easily?

Since its revenue growth is moving in the wrong direction, Reliance Global Holdings shareholders may wish to think ahead to when the company may need to raise more cash. Companies can raise capital through either debt or equity. Commonly, a business will sell new shares in itself to raise cash and drive growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).

Reliance Global Holdings has a market capitalisation of HK$257m and burnt through HK$21m last year, which is 8.0% of the company's market value. Given that is a rather small percentage, it would probably be really easy for the company to fund another year's growth by issuing some new shares to investors, or even by taking out a loan.

Is Reliance Global Holdings' Cash Burn A Worry?

It may already be apparent to you that we're relatively comfortable with the way Reliance Global Holdings is burning through its cash. In particular, we think its cash runway stands out as evidence that the company is well on top of its spending. While we must concede that its falling revenue is a bit worrying, the other factors mentioned in this article provide great comfort when it comes to the cash burn. Based on the factors mentioned in this article, we think its cash burn situation warrants some attention from shareholders, but we don't think they should be worried. Separately, we looked at different risks affecting the company and spotted 3 warning signs for Reliance Global Holdings (of which 2 are a bit unpleasant!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.