Latest news with #KLSE
Yahoo
12 hours ago
- Business
- Yahoo
Mah Sing Group Berhad (KLSE:MAHSING) Shares Could Be 34% Above Their Intrinsic Value Estimate
The projected fair value for Mah Sing Group Berhad is RM0.76 based on 2 Stage Free Cash Flow to Equity Current share price of RM1.02 suggests Mah Sing Group Berhad is potentially 34% overvalued The RM2.09 analyst price target for MAHSING is 174% more than our estimate of fair value Does the June share price for Mah Sing Group Berhad (KLSE:MAHSING) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by estimating the company's future cash flows and discounting them to their present value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. 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 begin with, we have to get estimates of 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 discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (MYR, Millions) -RM30.3m RM158.7m RM270.0m RM241.2m RM225.8m RM218.1m RM215.4m RM215.8m RM218.4m RM222.7m Growth Rate Estimate Source Analyst x2 Analyst x2 Analyst x1 Est @ -10.68% Est @ -6.39% Est @ -3.38% Est @ -1.27% Est @ 0.20% Est @ 1.23% Est @ 1.95% Present Value (MYR, Millions) Discounted @ 12% -RM27.1 RM127 RM193 RM154 RM129 RM112 RM98.5 RM88.3 RM79.9 RM72.9 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM1.0b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. 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 12%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM223m× (1 + 3.6%) ÷ (12%– 3.6%) = RM2.8b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM2.8b÷ ( 1 + 12%)10= RM923m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is RM2.0b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of RM1.0, the company appears reasonably expensive at the time of writing. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. 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 Mah Sing Group 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 12%, which is based on a levered beta of 1.379. 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. View our latest analysis for Mah Sing Group Berhad Strength Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Earnings growth over the past year underperformed the Real Estate industry. Dividend is low compared to the top 25% of dividend payers in the Real Estate market. Opportunity Annual earnings are forecast to grow faster than the Malaysian market. Good value based on P/E ratio compared to estimated Fair P/E ratio. Threat Revenue is forecast to grow slower than 20% per year. Valuation is only one side of the coin in terms of building your investment thesis, and it ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. 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 example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Can we work out why the company is trading at a premium to intrinsic value? For Mah Sing Group Berhad, there are three further elements you should look at: Risks: As an example, we've found 1 warning sign for Mah Sing Group Berhad that you need to consider before investing here. Future Earnings: How does MAHSING'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 High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! 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. 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
12 hours ago
- Business
- Yahoo
There's Been No Shortage Of Growth Recently For Erdasan Group Berhad's (KLSE:ERDASAN) Returns On Capital
If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So on that note, Erdasan Group Berhad (KLSE:ERDASAN) looks quite promising in regards to its trends of return on capital. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on Erdasan Group Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.10 = RM17m ÷ (RM191m - RM27m) (Based on the trailing twelve months to March 2025). Therefore, Erdasan Group Berhad has an ROCE of 10%. In absolute terms, that's a satisfactory return, but compared to the Machinery industry average of 7.5% it's much better. View our latest analysis for Erdasan Group Berhad While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how Erdasan Group Berhad has performed in the past in other metrics, you can view this free graph of Erdasan Group Berhad's past earnings, revenue and cash flow. We're delighted to see that Erdasan Group Berhad is reaping rewards from its investments and is now generating some pre-tax profits. About five years ago the company was generating losses but things have turned around because it's now earning 10% on its capital. In addition to that, Erdasan Group Berhad is employing 166% more capital than previously which is expected of a company that's trying to break into profitability. We like this trend, because it tells us the company has profitable reinvestment opportunities available to it, and if it continues going forward that can lead to a multi-bagger performance. To the delight of most shareholders, Erdasan Group Berhad has now broken into profitability. However the stock is down a substantial 97% in the last five years so there could be other areas of the business hurting its prospects. In any case, we believe the economic trends of this company are positive and looking into the stock further could prove rewarding. Erdasan Group Berhad does have some risks though, and we've spotted 2 warning signs for Erdasan Group Berhad that you might be interested in. While Erdasan Group Berhad isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. 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
12 hours ago
- Business
- Yahoo
Earnings Miss: IJM Corporation Berhad Missed EPS By 15% And Analysts Are Revising Their Forecasts
As you might know, IJM Corporation Berhad (KLSE:IJM) last week released its latest full-year, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at RM6.3b, statutory earnings missed forecasts by 15%, coming in at just RM0.12 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Taking into account the latest results, the current consensus from IJM Corporation Berhad's 15 analysts is for revenues of RM6.98b in 2026. This would reflect a meaningful 12% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 22% to RM0.16. In the lead-up to this report, the analysts had been modelling revenues of RM7.18b and earnings per share (EPS) of RM0.16 in 2026. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS. View our latest analysis for IJM Corporation Berhad The average price target was steady at RM3.23even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values IJM Corporation Berhad at RM3.80 per share, while the most bearish prices it at RM2.50. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable. Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting IJM Corporation Berhad's growth to accelerate, with the forecast 12% annualised growth to the end of 2026 ranking favourably alongside historical growth of 2.4% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 13% per year. IJM Corporation Berhad is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors. The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Still, earnings per share are more important to value creation for shareholders. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for IJM Corporation Berhad going out to 2028, and you can see them free on our platform here. However, before you get too enthused, we've discovered 1 warning sign for IJM Corporation Berhad that you should be aware of. 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
13 hours ago
- Business
- Yahoo
There's Been No Shortage Of Growth Recently For Erdasan Group Berhad's (KLSE:ERDASAN) Returns On Capital
If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. So on that note, Erdasan Group Berhad (KLSE:ERDASAN) looks quite promising in regards to its trends of return on capital. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. The formula for this calculation on Erdasan Group Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.10 = RM17m ÷ (RM191m - RM27m) (Based on the trailing twelve months to March 2025). Therefore, Erdasan Group Berhad has an ROCE of 10%. In absolute terms, that's a satisfactory return, but compared to the Machinery industry average of 7.5% it's much better. View our latest analysis for Erdasan Group Berhad While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how Erdasan Group Berhad has performed in the past in other metrics, you can view this free graph of Erdasan Group Berhad's past earnings, revenue and cash flow. We're delighted to see that Erdasan Group Berhad is reaping rewards from its investments and is now generating some pre-tax profits. About five years ago the company was generating losses but things have turned around because it's now earning 10% on its capital. In addition to that, Erdasan Group Berhad is employing 166% more capital than previously which is expected of a company that's trying to break into profitability. We like this trend, because it tells us the company has profitable reinvestment opportunities available to it, and if it continues going forward that can lead to a multi-bagger performance. To the delight of most shareholders, Erdasan Group Berhad has now broken into profitability. However the stock is down a substantial 97% in the last five years so there could be other areas of the business hurting its prospects. In any case, we believe the economic trends of this company are positive and looking into the stock further could prove rewarding. Erdasan Group Berhad does have some risks though, and we've spotted 2 warning signs for Erdasan Group Berhad that you might be interested in. While Erdasan Group Berhad isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. 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
13 hours ago
- Business
- Yahoo
Calculating The Intrinsic Value Of Hwa Tai Industries Berhad (KLSE:HWATAI)
Hwa Tai Industries Berhad's estimated fair value is RM0.48 based on 2 Stage Free Cash Flow to Equity Hwa Tai Industries Berhad's RM0.51 share price indicates it is trading at similar levels as its fair value estimate Industry average of 503% suggests Hwa Tai Industries Berhad's peers are currently trading at a higher premium to fair value In this article we are going to estimate the intrinsic value of Hwa Tai Industries Berhad (KLSE:HWATAI) by projecting its future cash flows and then discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. 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. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last 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. Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (MYR, Millions) RM454.8k RM733.2k RM1.06m RM1.39m RM1.72m RM2.02m RM2.29m RM2.52m RM2.74m RM2.93m Growth Rate Estimate Source Est @ 85.90% Est @ 61.22% Est @ 43.95% Est @ 31.86% Est @ 23.39% Est @ 17.47% Est @ 13.32% Est @ 10.41% Est @ 8.38% Est @ 6.96% Present Value (MYR, Millions) Discounted @ 8.7% RM0.4 RM0.6 RM0.8 RM1.0 RM1.1 RM1.2 RM1.3 RM1.3 RM1.3 RM1.3 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM10m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. 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 8.7%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM2.9m× (1 + 3.6%) ÷ (8.7%– 3.6%) = RM59m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM59m÷ ( 1 + 8.7%)10= RM26m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is RM36m. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of RM0.5, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the 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 Hwa Tai Industries 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 8.7%, which is based on a levered beta of 0.861. 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. View our latest analysis for Hwa Tai Industries Berhad Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize 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. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Hwa Tai Industries Berhad, there are three additional items you should look at: Risks: Be aware that Hwa Tai Industries Berhad is showing 2 warning signs in our investment analysis , you should know about... Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! Other Environmentally-Friendly Companies: Concerned about the environment and think consumers will buy eco-friendly products more and more? Browse through our interactive list of companies that are thinking about a greener future to discover some stocks you may not have thought of! 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.
