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24 minutes ago
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Kim Heng's (Catalist:5G2) Promising Earnings May Rest On Soft Foundations
Explore Kim Heng's Fair Values from the Community and select yours Kim Heng Limited's (Catalist:5G2) robust earnings report didn't manage to move the market for its stock. We did some digging, and we found some concerning factors in the details. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Examining Cashflow Against Kim Heng's Earnings One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking. Over the twelve months to June 2025, Kim Heng recorded an accrual ratio of -0.11. That implies it has good cash conversion, and implies that its free cash flow solidly exceeded its profit last year. Indeed, in the last twelve months it reported free cash flow of S$14m, well over the S$1.77m it reported in profit. Given that Kim Heng had negative free cash flow in the prior corresponding period, the trailing twelve month resul of S$14m would seem to be a step in the right direction. Having said that, there is more to the story. We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio. Check out our latest analysis for Kim Heng Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Kim Heng. How Do Unusual Items Influence Profit? While the accrual ratio might bode well, we also note that Kim Heng's profit was boosted by unusual items worth S$3.4m in the last twelve months. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. And, after all, that's exactly what the accounting terminology implies. We can see that Kim Heng's positive unusual items were quite significant relative to its profit in the year to June 2025. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power. Our Take On Kim Heng's Profit Performance Kim Heng's profits got a boost from unusual items, which indicates they might not be sustained and yet its accrual ratio still indicated solid cash conversion, which is promising. Based on these factors, we think it's very unlikely that Kim Heng's statutory profits make it seem much weaker than it is. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 3 warning signs for Kim Heng you should be mindful of and 1 of them can't be ignored. Our examination of Kim Heng has focussed on certain factors that can make its earnings look better than they are. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24 minutes ago
- Yahoo
There May Be Some Bright Spots In Attika Group's (Catalist:53W) Earnings
Investors were disappointed with the weak earnings posted by Attika Group Ltd. (Catalist:53W ). While the headline numbers were soft, we believe that investors might be missing some encouraging factors. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Zooming In On Attika Group's Earnings Many investors haven't heard of the accrual ratio from cashflow, but it is actually a useful measure of how well a company's profit is backed up by free cash flow (FCF) during a given period. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. This ratio tells us how much of a company's profit is not backed by free cashflow. As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking. Attika Group has an accrual ratio of 0.25 for the year to June 2025. Unfortunately, that means its free cash flow fell significantly short of its reported profits. In the last twelve months it actually had negative free cash flow, with an outflow of S$711k despite its profit of S$2.57m, mentioned above. It's worth noting that Attika Group generated positive FCF of S$5.9m a year ago, so at least they've done it in the past. Having said that, there is more to the story. We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio. One positive for Attika Group shareholders is that it's accrual ratio was significantly better last year, providing reason to believe that it may return to stronger cash conversion in the future. Shareholders should look for improved cashflow relative to profit in the current year, if that is indeed the case. See our latest analysis for Attika Group Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Attika Group. The Impact Of Unusual Items On Profit Attika Group's profit suffered from unusual items, which reduced profit by S$946k in the last twelve months. If this was a non-cash charge, it would have made the accrual ratio better, if cashflow had stayed strong, so it's not great to see in combination with an uninspiring accrual ratio. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. Assuming those unusual expenses don't come up again, we'd therefore expect Attika Group to produce a higher profit next year, all else being equal. Our Take On Attika Group's Profit Performance In conclusion, Attika Group's accrual ratio suggests that its statutory earnings are not backed by cash flow, even though unusual items weighed on profit. Given the contrasting considerations, we don't have a strong view as to whether Attika Group's profits are an apt reflection of its underlying potential for profit. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. When we did our research, we found 4 warning signs for Attika Group (2 are a bit unpleasant!) that we believe deserve your full attention. In this article we've looked at a number of factors that can impair the utility of profit numbers, as a guide to a business. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
24 minutes ago
- Yahoo
XtalPi Signs MOU with Dong-A ST for Joint Research and Development of Immunology and Inflammation Therapies
CAMBRIDGE, Mass., Aug. 19, 2025 /PRNewswire/ -- XtalPi announced on the 20th that it signed a Memorandum of Understanding (MOU) with Korea's leading pharmaceutical company Dong-A ST, to jointly develop therapeutics for immunological and inflammatory diseases. This collaboration will be based on XtalPi's intelligent and automated drug discovery platform, which integrates artificial intelligence (AI), quantum physics, and large-scale automated robotic experiments. The two companies plan to co-identify targets and discover first-in-class or best-in-class drug candidates using XtalPi's proprietary AI-driven drug discovery platform. The XtalPi platform combines the speed and generative power of AI with the accuracy of its robotic lab-in-the-loop to accelerate drug discovery and vastly expand the explorable chemical space. This integrated workflow spans deep-learning-based molecule design, quantum physics and molecular dynamics simulations for predicting drug-target interactions, automated chemical synthesis, and experimental validation of candidate compounds' key pharmaceutical properties. Leveraging its expertise in immunology and inflammation as well as its experience in small molecule drug development, Dong-A ST will actively participate throughout the entire R&D process—including candidate validation, efficacy and safety testing, and the formulation of preclinical and clinical development strategies. The company also plans to explore strategies for pipeline expansion and assess commercialization potential. Through this partnership, Dong-A ST aims to strengthen its pipeline in the immunology and inflammation space and expand its R&D scope beyond small molecule therapeutics into areas such as targeted protein degradation (TPD), biologics, antibody-drug conjugates (ADC), and gene therapies. John Wang, Senior Vice President of Drug Discovery at XtalPi, stated: "The combination of Dong-A ST's extensive expertise and XtalPi's proven AI-robotics platform is well-positioned to translate scientific innovation into competitive precision medicines. Together, we aim to rapidly discover and rigorously validate novel drug candidates across multiple modalities to unlock unique market opportunities, and deliver transformative therapies for global patients." Jae-Hong Park, Head of R&D at Dong-A ST, remarked, "This collaboration marks a pivotal step in expanding Dong-A ST's R&D capabilities," adding, "By leveraging synergies with XtalPi's AI platform, we expect to accelerate the development of next-generation treatments for immune and inflammatory diseases." Meanwhile, both Dong-A ST and XtalPi operate open innovation offices in Boston, USA. This geographic proximity will facilitate closer and more efficient collaboration throughout the drug discovery process. About Dong-A ST Dong-A ST Co., Ltd. ( was established in 1932 and is a leading Korean pharmaceutical company engaged in the development, manufacturing, and commercialization of ethical drugs, biosimilars, medical devices, and diagnostics. Its key products include Stillen (gastritis), Zydena (erectile dysfunction), Motilitone (functional dyspepsia), and Imuldosa (ustekinuma biosimilar). Leveraging strong R&D capabilities and a history of innovation, Dong-A ST is expanding its pipeline in immunology, inflammation, neurological disease, metabolic diseases, and oncology, while advancing into new modalities such as biologics, ADCs, TPD, and gene therapies. About XtalPi XtalPi Holdings Limited (XtalPi, was founded in 2015 by three physicists from the Massachusetts Institute of Technology (MIT). It is an innovative R&D platform powered by quantum physics, artificial intelligence, and robotics. By integrating first-principles calculations, AI algorithms, high-performance cloud computing, and standardized automation systems, XtalPi provides digital and intelligent R&D solutions for companies in the pharmaceutical, materials science, agricultural technology, energy, new chemicals, and cosmetics industries. View original content to download multimedia: SOURCE XtalPi Inc. Sign in to access your portfolio
