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Yahoo
19-05-2025
- Business
- Yahoo
Here's Why We're Wary Of Buying Riverstone Holdings' (SGX:AP4) For Its Upcoming Dividend
Readers hoping to buy Riverstone Holdings Limited (SGX:AP4) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Thus, you can purchase Riverstone Holdings' shares before the 23rd of May in order to receive the dividend, which the company will pay on the 6th of June. The company's next dividend payment will be RM00.03 per share, and in the last 12 months, the company paid a total of RM0.24 per share. Looking at the last 12 months of distributions, Riverstone Holdings has a trailing yield of approximately 10.0% on its current stock price of S$0.725. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Riverstone Holdings has been able to grow its dividends, or if the dividend might be cut. 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. If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Last year, Riverstone Holdings paid out 104% of its income as dividends, which is above a level that we're comfortable with, especially if the company needs to reinvest in its business. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. Riverstone Holdings paid out more free cash flow than it generated - 128%, to be precise - last year, which we think is concerningly high. It's hard to consistently pay out more cash than you generate without either borrowing or using company cash, so we'd wonder how the company justifies this payout level. Riverstone Holdings does have a large net cash position on the balance sheet, which could fund large dividends for a time, if the company so chose. Still, smart investors know that it is better to assess dividends relative to the cash and profit generated by the business. Paying dividends out of cash on the balance sheet is not long-term sustainable. Cash is slightly more important than profit from a dividend perspective, but given Riverstone Holdings's payouts were not well covered by either earnings or cash flow, we would be concerned about the sustainability of this dividend. View our latest analysis for Riverstone Holdings Click here to see the company's payout ratio, plus analyst estimates of its future dividends. Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Riverstone Holdings's earnings per share have risen 16% per annum over the last five years. We're a bit put out by the fact that Riverstone Holdings paid out virtually all of its earnings and cashflow as dividends over the last year. Earnings are growing at a decent clip, so this payout ratio may prove sustainable, but it's not great to see. The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Riverstone Holdings has lifted its dividend by approximately 30% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see. Has Riverstone Holdings got what it takes to maintain its dividend payments? Earnings per share have been growing, despite the company paying out a concerningly high percentage of its earnings and cashflow. We struggle to see how a company paying out so much of its earnings and cash flow will be able to sustain its dividend in a downturn, or reinvest enough into its business to continue growing earnings without borrowing heavily. Overall it doesn't look like the most suitable dividend stock for a long-term buy and hold investor. So if you're still interested in Riverstone Holdings despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. In terms of investment risks, we've identified 1 warning sign with Riverstone Holdings and understanding them should be part of your investment process. If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks. 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
12-05-2025
- Business
- Yahoo
Estimating The Fair Value Of DS Sigma Holdings Berhad (KLSE:DSS)
The projected fair value for DS Sigma Holdings Berhad is RM0.26 based on 2 Stage Free Cash Flow to Equity Current share price of RM0.24 suggests DS Sigma Holdings Berhad is potentially trading close to its fair value Peers of DS Sigma Holdings Berhad are currently trading on average at a 321% premium Today we will run through one way of estimating the intrinsic value of DS Sigma Holdings Berhad (KLSE:DSS) by estimating the company's future cash flows and discounting them to their present value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Believe it or not, it's not too difficult to follow, as you'll see from our example! Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. 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 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. 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) RM7.24m RM6.95m RM6.83m RM6.82m RM6.89m RM7.01m RM7.17m RM7.36m RM7.58m RM7.82m Growth Rate Estimate Source Est @ -7.29% Est @ -4.02% Est @ -1.74% Est @ -0.13% Est @ 0.99% Est @ 1.77% Est @ 2.32% Est @ 2.70% Est @ 2.97% Est @ 3.16% Present Value (MYR, Millions) Discounted @ 8.3% RM6.7 RM5.9 RM5.4 RM4.9 RM4.6 RM4.3 RM4.1 RM3.9 RM3.7 RM3.5 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM47m The second stage is also known as Terminal Value, this is the business's cash flow after 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 8.3%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM7.8m× (1 + 3.6%) ÷ (8.3%– 3.6%) = RM171m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM171m÷ ( 1 + 8.3%)10= RM77m The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is RM124m. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of RM0.2, the company appears about fair value at a 6.9% discount to where the stock price trades currently. 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. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. 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 DS Sigma Holdings 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 8.3%, 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 DS Sigma Holdings Berhad Strength Currently debt free. Dividends are covered by earnings and cash flows. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Packaging market. Opportunity Current share price is below our estimate of fair value. Lack of analyst coverage makes it difficult to determine DSS' earnings prospects. Threat No apparent threats visible for DSS. Although the valuation of a company is important, 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. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. 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 DS Sigma Holdings Berhad, we've compiled three additional items you should further examine: Risks: For instance, we've identified 2 warning signs for DS Sigma Holdings Berhad (1 is a bit concerning) you should be aware of. 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! 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. 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
13-03-2025
- Business
- Yahoo
SumiSaujana Group Berhad to Raise RM74.4 Million from ACE Market IPO
KUALA LUMPUR, MALAYSIA / / March 13, 2025 / SumiSaujana Group Berhad ("SumiSaujana" or the "Company") and its subsidiary ("Group"), an established manufacturer of oil and gas ("O&G") specialty chemicals, has launched its prospectus in conjunction with its proposed Initial Public Offering ("IPO") on the ACE Market of Bursa Malaysia Securities Berhad ("Bursa Securities"). This IPO marks a significant step in SumiSaujana's corporate evolution, providing the Group with the resources to expand its production capacity, enhance global market penetration, and strengthen business sustainability. L-R: (From SumiSaujana Group Berhad) Mr. Ramli Bin Mohamad, Executive Director/ Chief Operating Officer; Mr. Toh Chee Seng 陀志成, Executive Deputy Chairman; Mr. Norazlam bin Norbi, Executive Director/ Chief Executive Officer; (From RHB Investment Bank Berhad) Mr. Kevin Davies, Chief Executive Officer/ Managing Director; Mr. Tommy Har 夏荣斌, Director, Head, Corporate Finance Established in 2010, SumiSaujana has built a reputation as a trusted manufacturer and supplier of high-performance specialty chemicals for the oil and gas industry. The Group specialises in drilling fluid chemicals, production chemicals, and refinery chemicals, which are essential in enhancing operational efficiency, equipment protection, and process optimisation across the upstream, midstream, and downstream oil and gas sectors. Over the years, SumiSaujana has secured long-term partnerships with multinational oilfield service providers, international oil companies, and national oil corporations, reinforcing its strong market presence. Over 70% of SumiSaujana's revenue comes from international markets, including the Asia Pacific, Middle East, Africa, Europe, and the Americas region. Through this IPO exercise, SumiSaujana aims to raise RM74.4 million via the issuance of 310.0 million new shares at an issue price of RM0.24 per share. The proceeds from the IPO will be allocated as follows: RM40.2 million (54.0%) for the acquisitions of the New Puncak Alam Warehouse and New Puncak Alam Corporate Office to consolidate its operational and warehousing facilities. RM18.9 million (25.4%) for the acquisition of its existing Puncak Alam Factory to support long-term operational sustainability. RM2.1 million (2.8%) for capital expenditure, supporting enhancements to its facilities. RM7.6 million (10.3%) for expansion of R&D division. RM5.6 million (7.5%) for listing expenses. As part of the IPO, an Offer for Sale of up to 90.0 million shares, representing 6.23% of the enlarged share capital, will be made available via private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (MITI). The proceeds from the Offer for Sale will accrue to the Selling Shareholders. Applications for the IPO open today following the prospectus launch and will close on 25 March 2025. SumiSaujana is expected to debut on the ACE Market of Bursa Securities on 9 April 2025. At an IPO price of RM0.24 per share, the company's market capitalisation upon listing will be approximately RM346.5 million. Encik Norazlam Bin Norbi, Executive Director/ Chief Executive Officer of SumiSaujana Group Berhad, commented, "The launch of our IPO prospectus represents a transformative moment for SumiSaujana Group Berhad. Since our establishment, we have continuously expanded our capabilities and strengthened our position as a trusted solutions provider for the oil and gas industry. Our ability to consistently meet the evolving demands of our customers has been key to our success, and this IPO will enable us to further accelerate our growth trajectory." He added, "We are committed to driving business sustainability and innovation, ensuring that our customers continue to receive high-quality specialty chemicals that enhance efficiency and reliability in their operations. With the funds raised, we will focus on expanding our production capacity, strengthening our global footprint, and reinforcing our commitment to delivering value to all our stakeholders." Mr. Kevin Davies, Chief Executive Officer/ Managing Director of RHB Investment Bank Berhad, stated, "We are honoured to partner with SumiSaujana Group Berhad on this significant milestone. Thier IPO marks the beginning of a new phase of expansion and opportunity for SumiSaujana, positioning it for continued success in the highly specialised oil and gas industry. As the Principal Adviser, Sponsor, Sole Underwriter, and Sole Placement Agent, RHB Investment Bank Berhad is privileged to be part of this journey and looks forward to supporting the Group as it takes this next step forward." Beyond O&G specialty chemicals, SumiSaujana is expanding into the industrial specialty chemicals sector to diversify its product portfolio. Internationally, the Group is strengthening its global footprint with plans to set up a new production facility in North America and the Middle East, reinforcing its presence in key international markets. With its upcoming listing on the ACE Market of Bursa Securities, the Company is poised for accelerated growth, market expansion, and long-term value creation for stakeholders. The Group's strategic investments in manufacturing, R&D, and sustainability initiatives reinforce its position as a trusted name in the global O&G specialty chemicals sector. RHB Investment Bank Berhad is the Principal Adviser, Sponsor, Sole Underwriter and Sole Placement Agent for SumiSaujana Group Berhad's IPO. About SumiSaujana Group Berhad SumiSaujana Group Berhad and its subsidiary ("SumiSaujana Group") is an established manufacturer of oil and gas ("O&G") specialty chemicals with over a decade of experience, specialising in the formulation, manufacturing, and supply of drilling fluid chemicals, and production, and refinery chemicals for the upstream, midstream, and downstream segments in the O&G industry. With a strong presence in Malaysia and exports to the Asia Pacific, Middle East and North America regions, SumiSaujana Group serves top-tier global O&G service providers, production and refinery companies and chemical manufacturers. As a Petronas-licensed manufacturer, SumiSaujana Group is committed to innovation, quality, and sustainability, continuously enhancing its product offerings to meet the evolving needs of the global O&G industry. For more information, visithttps:// and Issued By: Swan Consultancy Sdn. Bhd. on behalf of SumiSaujana Group Berhad For more information, please contact: Jazzmin Wan Email: William Yeo Email: SOURCE: SumiSaujana Group Berhad View the original press release on ACCESS Newswire Sign in to access your portfolio
Yahoo
03-03-2025
- Business
- Yahoo
A Look At The Fair Value Of Daythree Digital Berhad (KLSE:DAY3)
Daythree Digital Berhad's estimated fair value is RM0.24 based on Dividend Discount Model Current share price of RM0.28 suggests Daythree Digital Berhad is potentially trading close to its fair value Industry average of 367% suggests Daythree Digital Berhad's peers are currently trading at a higher premium to fair value How far off is Daythree Digital Berhad (KLSE:DAY3) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to their present value. We will use the Discounted Cash Flow (DCF) model on this occasion. Believe it or not, it's not too difficult to follow, as you'll see from our example! We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. See our latest analysis for Daythree Digital Berhad As Daythree Digital Berhad operates in the commercial services sector, we need to calculate the intrinsic value slightly differently. In this approach dividends per share (DPS) are used, as free cash flow is difficult to estimate and often not reported by analysts. This often underestimates the value of a stock, but it can still be good as a comparison to competitors. We use the Gordon Growth Model, which assumes dividend will grow into perpetuity at a rate that can be sustained. For a number of reasons a very conservative growth rate is used that cannot exceed that of a company's Gross Domestic Product (GDP). In this case we used the 5-year average of the 10-year government bond yield (3.6%). The expected dividend per share is then discounted to today's value at a cost of equity of 9.6%. Relative to the current share price of RM0.3, the company appears around fair value 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. Value Per Share = Expected Dividend Per Share / (Discount Rate - Perpetual Growth Rate) = RM0.01 / (9.6% – 3.6%) = RM0.2 Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. 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 Daythree Digital 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 9.6%, which is based on a levered beta of 1.008. 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. Strength Currently debt free. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Commercial Services market. Current share price is above our estimate of fair value. Opportunity DAY3's financial characteristics indicate limited near-term opportunities for shareholders. Lack of analyst coverage makes it difficult to determine DAY3's earnings prospects. Threat Paying a dividend but company has no free cash flows. 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. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. 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 Daythree Digital Berhad, we've put together three fundamental aspects you should consider: Risks: Every company has them, and we've spotted 3 warning signs for Daythree Digital Berhad you should know about. 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! Other Top Analyst Picks: Interested to see what the analysts are thinking? Take a look at our interactive list of analysts' top stock picks to find out what they feel might have an attractive future outlook! 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.
Yahoo
28-02-2025
- Business
- Yahoo
Crest Builder Holdings Berhad Full Year 2024 Earnings: EPS: RM0.035 (vs RM0.24 loss in FY 2023)
Revenue: RM574.6m (up 18% from FY 2023). Net income: RM5.65m (up from RM38.9m loss in FY 2023). Profit margin: 1.0% (up from net loss in FY 2023). The move to profitability was driven by higher revenue. EPS: RM0.035 (up from RM0.24 loss in FY 2023). All figures shown in the chart above are for the trailing 12 month (TTM) period Crest Builder Holdings Berhad shares are down 2.5% from a week ago. You should learn about the 2 warning signs we've spotted with Crest Builder Holdings Berhad (including 1 which shouldn't be ignored). 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.
