Latest news with #IOICorporation
Free Malaysia Today
20 hours ago
- Business
- Free Malaysia Today
Address RON95 subsidy cut before carbon tax, says Amir Hamzah
Finance minister II Amir Hamzah Azizan said Malaysia must address the issue of fuel subsidies, particularly involving the energy sector. PETALING JAYA : The government will prioritise the rationalisation of RON95 petrol subsidies this year before introducing a carbon tax in 2026, says finance minister II Amir Hamzah Azizan. Speaking at a forum today, he said Malaysia must first address the issue of fuel subsidies, particularly involving the energy sector. 'We must ensure that no unintended consequences are embedded in our system. While (the carbon tax) is scheduled for rollout by 2026, there are important precursor steps we must take. 'A key objective now is to begin scaling back subsidies (to the energy sector). It doesn't make sense to impose taxes on one side and simultaneously provide subsidies for petrol, diesel, and other fuels,' Bernama reported him as saying. Amir Hamzah was speaking at a session titled 'Delivering Malaysia's Energy Transition' where he was a panellist alongside deputy energy transition and water transformation minister Akmal Nasrullah Nasir. The session was chaired by Abdul Wahid Omar, a senior independent and non-executive director of IOI Corporation Bhd. The government previously announced plans to roll out a carbon tax targeting the iron, steel, and energy industries by 2026, as outlined in Budget 2025. Amir Hamzah also emphasised that subsidy rationalisation is a critical step toward establishing a strong foundation for building sustainable mechanisms and policy frameworks. 'As a result, we can expect the introduction of structured measures, including climate action frameworks, robust measurement tools and ultimately the implementation of a carbon tax to support these initiatives. 'If we want this transition to be sustainable and impactful, the entire system must respond. It cannot be driven by isolated announcements or standalone policies. The challenge for the government is to tie everything together coherently and effectively,' he said. Yesterday, Prime Minister Anwar Ibrahim said adjustments to the price of RON95 petrol would not affect 85% to 90% of the population. He said the government's move towards subsidy rationalisation is a critical step to ensure national resources are channelled effectively to benefit the lower-income group.
Yahoo
3 days ago
- Business
- Yahoo
IOI Corporation Berhad's (KLSE:IOICORP) Intrinsic Value Is Potentially 17% Below Its Share Price
IOI Corporation Berhad's estimated fair value is RM2.99 based on 2 Stage Free Cash Flow to Equity IOI Corporation Berhad's RM3.61 share price signals that it might be 21% overvalued The RM4.07 analyst price target for IOICORP is 36% more than our estimate of fair value Today we will run through one way of estimating the intrinsic value of IOI Corporation Berhad (KLSE:IOICORP) by taking the expected future cash flows and discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. 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. We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (MYR, Millions) RM917.4m RM999.1m RM1.00b RM1.01b RM1.03b RM1.06b RM1.09b RM1.12b RM1.16b RM1.20b Growth Rate Estimate Source Analyst x2 Analyst x4 Analyst x4 Est @ 1.22% Est @ 1.95% Est @ 2.45% Est @ 2.81% Est @ 3.06% Est @ 3.23% Est @ 3.36% Present Value (MYR, Millions) Discounted @ 8.4% RM846 RM851 RM786 RM734 RM691 RM653 RM619 RM589 RM561 RM535 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM6.9b After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 3.6%. We discount the terminal cash flows to today's value at a cost of equity of 8.4%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM1.2b× (1 + 3.6%) ÷ (8.4%– 3.6%) = RM26b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM26b÷ ( 1 + 8.4%)10= RM12b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is RM19b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of RM3.6, the company appears slightly overvalued at the time of writing. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at IOI Corporation Berhad as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.4%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for IOI Corporation Berhad Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Weakness Dividend is low compared to the top 25% of dividend payers in the Food market. Expensive based on P/E ratio and estimated fair value. Opportunity IOICORP's financial characteristics indicate limited near-term opportunities for shareholders. Threat Dividends are not covered by cash flow. Annual earnings are forecast to decline for the next 3 years. Valuation is only one side of the coin in terms of building your investment thesis, and it is only one of many factors that you need to assess for a company. It's not possible to obtain a foolproof valuation with a DCF model. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Can we work out why the company is trading at a premium to intrinsic value? For IOI Corporation Berhad, we've put together three relevant factors you should assess: Risks: Every company has them, and we've spotted 2 warning signs for IOI Corporation Berhad (of which 1 is potentially serious!) you should know about. Future Earnings: How does IOICORP's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every Malaysian stock every day, so if you want to find the intrinsic value of any other stock just search here. 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. Sign in to access your portfolio
Yahoo
21-05-2025
- Business
- Yahoo
IOI Corporation Berhad's (KLSE:IOICORP) largest shareholders are private companies with 53% ownership, institutions own 34%
The considerable ownership by private companies in IOI Corporation Berhad indicates that they collectively have a greater say in management and business strategy Progressive Holdings Sdn. Bhd. owns 50% of the company Institutional ownership in IOI Corporation Berhad is 34% Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. To get a sense of who is truly in control of IOI Corporation Berhad (KLSE:IOICORP), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk). And institutions on the other hand have a 34% ownership in the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. Let's delve deeper into each type of owner of IOI Corporation Berhad, beginning with the chart below. View our latest analysis for IOI Corporation Berhad Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices. IOI Corporation Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see IOI Corporation Berhad's historic earnings and revenue below, but keep in mind there's always more to the story. We note that hedge funds don't have a meaningful investment in IOI Corporation Berhad. Progressive Holdings Sdn. Bhd. is currently the largest shareholder, with 50% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Meanwhile, the second and third largest shareholders, hold 14% and 7.9%, of the shares outstanding, respectively. While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too. The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. Our data suggests that insiders own under 1% of IOI Corporation Berhad in their own names. However, it's possible that insiders might have an indirect interest through a more complex structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around RM183m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling. With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over IOI Corporation Berhad. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies. We can see that Private Companies own 53%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research. While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for IOI Corporation Berhad you should know about. If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. 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. 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