Latest news with #RM0.97
Yahoo
2 days ago
- Business
- Yahoo
Is Genetec Technology Berhad (KLSE:GENETEC) Worth RM1.0 Based On Its Intrinsic Value?
Genetec Technology Berhad's estimated fair value is RM0.78 based on 2 Stage Free Cash Flow to Equity Genetec Technology Berhad is estimated to be 25% overvalued based on current share price of RM0.97 Analyst price target for GENETEC is RM1.30, which is 67% above our fair value estimate Does the June share price for Genetec Technology Berhad (KLSE:GENETEC) 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. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. 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. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. 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. Generally we assume that a dollar today is more valuable than a dollar in the future, 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) RM94.4m RM20.6m RM32.1m RM41.5m RM50.5m RM58.7m RM66.0m RM72.4m RM78.2m RM83.4m Growth Rate Estimate Source Analyst x1 Analyst x1 Analyst x1 Est @ 29.30% Est @ 21.60% Est @ 16.21% Est @ 12.44% Est @ 9.80% Est @ 7.95% Est @ 6.66% Present Value (MYR, Millions) Discounted @ 13% RM83.8 RM16.2 RM22.5 RM25.8 RM27.9 RM28.8 RM28.8 RM28.1 RM26.9 RM25.5 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM314m 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 13%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM83m× (1 + 3.6%) ÷ (13%– 3.6%) = RM967m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM967m÷ ( 1 + 13%)10= RM296m 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 RM610m. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of RM1.0, the company appears slightly overvalued 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. 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 Genetec Technology 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 13%, which is based on a levered beta of 1.508. 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 Genetec Technology Berhad Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Weakness Earnings growth over the past year is below its 5-year average. Dividend is low compared to the top 25% of dividend payers in the Semiconductor market. Opportunity Annual revenue is forecast to grow faster than the Malaysian market. Good value based on P/E ratio compared to estimated Fair P/E ratio. Threat Annual earnings are forecast to grow slower than the Malaysian market. Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. DCF models are not the be-all and end-all of investment valuation. 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. What is the reason for the share price exceeding the intrinsic value? For Genetec Technology Berhad, there are three additional items you should consider: Risks: For instance, we've identified 1 warning sign for Genetec Technology Berhad that you should be aware of. Future Earnings: How does GENETEC'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. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the KLSE every day. If you want to find the calculation for other stocks 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
The Sun
21-05-2025
- Business
- The Sun
Oasis Harvest Q1 revenue drops to RM2.72m amid streamlined F&B operations
KUALA LUMPUR: Bursa Malaysia-listed food and beverage (F&B) player Oasis Harvest Corporation Bhd reported a net loss of RM0.97 million on the back of RM2.72 million in revenue for the first quarter (Q1) ended March 31, 2025 (FY25). The decline in revenue for the quarter, from RM3.72 million in the same quarter last year, was primarily due to the streamlined operations in the F&B segment. Oasis had strategically reduced its Uncle Don's restaurant outlets from six to three, in line with its ongoing efforts to optimize costs and enhance profitability. Commenting on the quarterly results, executive director Ch'ng Eu Vern said the reported loss for Q1 FY25 was largely influenced by strategic operational restructuring aimed at ensuring its future growth remains sustainable. 'While the closure of some outlets impacted our immediate revenues, these decisions were necessary steps to maintain cost discipline and improve the overall operational efficiency of our restaurant business,' he said. Ch'ng further explained the difference in comparative profitability, noting, 'It's important to highlight that the corresponding quarter last year included a RM2.1 million contingent consideration waiver, which positively impacted our results previously. 'Excluding this exceptional item, our current financial performance is aligned with expectations, reflecting ongoing adjustments designed to deliver longer-term financial stability and improved shareholder returns,' he said. Despite the near-term challenges, Oasis successfully generated positive cash flow from operating activities amounting to RM0.86 million during the quarter, indicating healthy underlying operational efficiency and prudent management of working capital. Moving forward, Oasis remains confident in its long-term strategic direction. 'We continue to invest in improving customer experiences, refining our menu offerings, and enhancing cost control measures across all outlets. 'These initiatives are critical for guaranteeing sustainable growth and delivering consistent value to our shareholders over the long run,' Ch'ng added. The group maintains a cautiously optimistic outlook, bolstered by its strategic position in the Klang Valley, which continues to show resilience even amid global economic uncertainties. Oasis remains committed to strengthening its F&B business, exploring complementary sectors within the travel, leisure, and hospitality ecosystem to diversify revenue streams and enhance shareholder value. Ch'ng said Oasis remains confident in its long-term strategic direction.
Yahoo
27-01-2025
- Business
- Yahoo
Calculating The Intrinsic Value Of Focus Point Holdings Berhad (KLSE:FOCUSP)
Using the 2 Stage Free Cash Flow to Equity, Focus Point Holdings Berhad fair value estimate is RM0.97 Current share price of RM0.83 suggests Focus Point Holdings Berhad is potentially trading close to its fair value Analyst price target for FOCUSP is RM1.12, which is 16% above our fair value estimate How far off is Focus Point Holdings Berhad (KLSE:FOCUSP) 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. This will be done using the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. 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. Check out our latest analysis for Focus Point Holdings Berhad We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. 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. Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (MYR, Millions) RM21.0m RM28.0m RM26.0m RM29.0m RM27.0m RM26.0m RM25.7m RM25.7m RM26.0m RM26.5m Growth Rate Estimate Source Analyst x1 Analyst x1 Analyst x1 Analyst x1 Analyst x1 Est @ -3.53% Est @ -1.40% Est @ 0.10% Est @ 1.14% Est @ 1.87% Present Value (MYR, Millions) Discounted @ 8.2% RM19.4 RM23.9 RM20.5 RM21.2 RM18.2 RM16.3 RM14.8 RM13.7 RM12.8 RM12.1 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM173m 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 8.2%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM26m× (1 + 3.6%) ÷ (8.2%– 3.6%) = RM599m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM599m÷ ( 1 + 8.2%)10= RM273m 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 RM446m. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of RM0.8, the company appears about fair value at a 14% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. 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 Focus Point 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 8.2%, which is based on a levered beta of 0.821. 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 Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Earnings growth over the past year is below its 5-year average. Dividend is low compared to the top 25% of dividend payers in the Healthcare market. Opportunity Annual earnings are forecast to grow faster than the Malaysian market. Good value based on P/E ratio and estimated fair value. Threat Revenue is forecast to grow slower than 20% per year. Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/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 Focus Point Holdings Berhad, we've put together three additional aspects you should consider: Risks: Take risks, for example - Focus Point Holdings Berhad has 2 warning signs we think you should be aware of. Future Earnings: How does FOCUSP'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
