Latest news with #BinastraCorporationBerhad
Yahoo
01-04-2025
- Business
- Yahoo
Binastra Corporation Berhad's (KLSE:BNASTRA) Profits May Be Overstating Its True Earnings Potential
Solid profit numbers didn't seem to be enough to please Binastra Corporation Berhad's (KLSE:BNASTRA) shareholders. Our analysis suggests they may be concerned about some underlying details. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. The ratio shows us how much a company's profit exceeds its FCF. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. 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. For the year to January 2025, Binastra Corporation Berhad had an accrual ratio of 0.90. Statistically speaking, that's a real negative for future earnings. To wit, the company did not generate one whit of free cashflow in that time. In the last twelve months it actually had negative free cash flow, with an outflow of RM44m despite its profit of RM90.3m, mentioned above. It's worth noting that Binastra Corporation Berhad generated positive FCF of RM3.0m a year ago, so at least they've done it in the past. Notably, the company has issued new shares, thus diluting existing shareholders and reducing their share of future earnings. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. In fact, Binastra Corporation Berhad increased the number of shares on issue by 20% over the last twelve months by issuing new shares. Therefore, each share now receives a smaller portion of profit. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. Check out Binastra Corporation Berhad's historical EPS growth by clicking on this link. As you can see above, Binastra Corporation Berhad has been growing its net income over the last few years, with an annualized gain of 1,751% over three years. But EPS was only up 499% per year, in the exact same period. And at a glance the 117% gain in profit over the last year impresses. But in comparison, EPS only increased by 101% over the same period. And so, you can see quite clearly that dilution is influencing shareholder earnings. Changes in the share price do tend to reflect changes in earnings per share, in the long run. So it will certainly be a positive for shareholders if Binastra Corporation Berhad can grow EPS persistently. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow. As it turns out, Binastra Corporation Berhad couldn't match its profit with cashflow and its dilution means that earnings per share growth is lagging net income growth. Considering all this we'd argue Binastra Corporation Berhad's profits probably give an overly generous impression of its sustainable level of profitability. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Our analysis shows 2 warning signs for Binastra Corporation Berhad (1 is potentially serious!) and we strongly recommend you look at these before investing. Our examination of Binastra Corporation Berhad has focussed on certain factors that can make its earnings look better than they are. And, on that basis, we are somewhat skeptical. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. 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.
Yahoo
30-03-2025
- Business
- Yahoo
Binastra Corporation Berhad Full Year 2025 Earnings: EPS Beats Expectations, Revenues Lag
Revenue: RM946.6m (up 123% from FY 2024). Net income: RM90.3m (up 117% from FY 2024). Profit margin: 9.5% (in line with FY 2024). EPS: RM0.10 (up from RM0.052 in FY 2024). 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. All figures shown in the chart above are for the trailing 12 month (TTM) period Revenue missed analyst estimates by 1.3%. Earnings per share (EPS) exceeded analyst estimates by 26%. The primary driver behind last 12 months revenue was the Construction segment contributing a total revenue of RM946.0m (100% of total revenue). Notably, cost of sales worth RM812.5m amounted to 86% of total revenue thereby underscoring the impact on earnings. The most substantial expense, totaling RM34.8m were related to Non-Operating costs. This indicates that a significant portion of the company's costs is related to non-core activities. Explore how BNASTRA's revenue and expenses shape its earnings. Looking ahead, revenue is forecast to grow 30% p.a. on average during the next 3 years, compared to a 14% growth forecast for the Construction industry in Malaysia. Performance of the Malaysian Construction industry. The company's shares are up 5.1% from a week ago. Be aware that Binastra Corporation Berhad is showing 2 warning signs in our investment analysis and 1 of those is potentially serious... 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.
