Latest news with #RM1.58
Yahoo
29-05-2025
- Business
- Yahoo
Estimating The Fair Value Of Kawan Food Berhad (KLSE:KAWAN)
Kawan Food Berhad's estimated fair value is RM1.58 based on 2 Stage Free Cash Flow to Equity Kawan Food Berhad's RM1.30 share price indicates it is trading at similar levels as its fair value estimate Kawan Food Berhad's peers are currently trading at a premium of 148% on average Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Kawan Food Berhad (KLSE:KAWAN) as an investment opportunity by estimating the company's future cash flows and discounting them to their present value. This will be done using the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example! We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. 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 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. 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, 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) RM31.3m RM30.2m RM29.7m RM29.7m RM30.0m RM30.6m RM31.3m RM32.2m RM33.2m RM34.2m Growth Rate Estimate Source Est @ -6.93% Est @ -3.76% Est @ -1.54% Est @ 0.01% Est @ 1.10% Est @ 1.86% Est @ 2.40% Est @ 2.77% Est @ 3.03% Est @ 3.21% Present Value (MYR, Millions) Discounted @ 8.4% RM28.9 RM25.7 RM23.3 RM21.5 RM20.1 RM18.9 RM17.8 RM16.9 RM16.1 RM15.3 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM204m 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 8.4%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM34m× (1 + 3.6%) ÷ (8.4%– 3.6%) = RM748m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM748m÷ ( 1 + 8.4%)10= RM334m 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 RM539m. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of RM1.3, the company appears about fair value at a 18% discount to where the stock price trades currently. 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. Now 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 Kawan Food 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. View our latest analysis for Kawan Food Berhad Strength Debt is not viewed as a risk. Dividend is in the top 25% of dividend payers in the market. Weakness Earnings declined over the past year. Opportunity Annual earnings are forecast to grow faster than the Malaysian market. Current share price is below our estimate of fair value. Threat Dividends are not covered by earnings and cashflows. 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. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Kawan Food Berhad, there are three fundamental items you should further examine: Risks: Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Kawan Food Berhad , and understanding this should be part of your investment process. Future Earnings: How does KAWAN'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.
Barnama
17-05-2025
- Barnama
Man Nabbed In RM1.6 Mln Drug Bust
BATU PAHAT, May 17 (Bernama) -- A 33-year-old man was arrested along with drugs worth RM1.6 million during a raid on a house in Taman Sri Mulia here on Wednesday. Batu Pahat district police chief ACP Shahrulanuar Mushaddat Abdullah Sani said the raid was carried out at around 7.45 pm based on information and intelligence regarding the suspect, who was believed to have been actively distributing drugs for the past month. He said that during the inspection, officers found powder suspected to be ecstasy weighing approximately 9.4 kilogrammes with an estimated value of RM1.58 million, and a substance believed to be ketamine weighing around 460 grammes and worth about RM23,000.
The Sun
17-05-2025
- The Sun
Man nabbed in RM1.6 mln drug bust
BATU PAHAT: A 33-year-old man was arrested along with drugs worth RM1.6 million during a raid on a house in Taman Sri Mulia here on Wednesday. Batu Pahat district police chief ACP Shahrulanuar Mushaddat Abdullah Sani said the raid was carried out at around 7.45 pm based on information and intelligence regarding the suspect, who was believed to have been actively distributing drugs for the past month. He said that during the inspection, officers found powder suspected to be ecstasy weighing approximately 9.4 kilogrammes with an estimated value of RM1.58 million, and a substance believed to be ketamine weighing around 460 grammes and worth about RM23,000. 'The suspect, who acted alone, had turned the premises into a storage and repackaging site. If successfully distributed, the drugs could have been used by around 47,000 addicts. 'A urine test on the suspect returned negative for drugs, and he has no prior criminal record,' he said in a statement today. In addition to the drugs, police also seized a car and RM45,000 in cash. The case is being investigated under Section 39B of the Dangerous Drugs Act 1952, and the suspect has been remanded for 12 days until Monday.
Malay Mail
01-05-2025
- Business
- Malay Mail
Malaysia eyes emerging markets, including China, to boost halal industry growth, says Matrade chairman
KUALA LUMPUR, May 1 — Malaysia is exploring opportunities in emerging markets, including China, as part of its efforts to expand the halal industry this year, said Malaysia External Trade Development Corporation (Matrade) chairman Datuk Seri Reezal Merican Naina Merican. He said the country has outlined several strategies and is currently reviewing all trading partners that contribute to Malaysia's trade surplus to support the development of the halal sector. 'We're also looking at those contributing to the trade deficit — especially those at the bottom of the list — to see how we can 'zerorise' them through what we call the 'retain and regain' mission,' he said. 'There are certain positions we want to retain, and some we aim to regain. All of this is being managed internally,' he told reporters after the soft launch of the 21st Malaysia International Halal Showcase (Mihas) themed 'Pinnacle of Halal Excellence' here, yesterday. Hence, Malaysia will host Mihas in Shanghai, China, from November 5 to 10, 2025, as part of its strategic participation in the China International Import Expo (CIIE) — one of Asia's leading trade exhibitions. 'This is why we're heading to China. CIIE is an import-focused exhibition, and among global trade fairs, it uniquely allows Mihas to coincide with it. They want to leverage Mihas, and Mihas also seeks to leverage CIIE,' he said. 'While Mihas typically attracts around 40,000 trade visitors, CIIE draws about 400,000. So, imagine the vast opportunity this presents to Mihas participants in Shanghai,' he said. Reezal emphasised the immense potential of the halal industry, aligning with the Halal Industry Master Plan 2030 (HIMP 2030), which values the global halal market at approximately US$5 trillion (US$1=RM4.31). 'With the global Muslim population nearing two billion, awareness around halal is growing significantly. 'In my discussions with Chinese counterparts, I explained that halal is not solely about Islam — it represents 'halalan toyyiban', encompassing hygiene, cleanliness, safety, originality, traceability, and sometimes sustainability.' He noted that many countries are increasingly interested in adopting halal-certified products due to the high standards and rigorous certification processes they entail. Reezal said that the global halal market is expanding rapidly, with demand for halal products increasing across international markets. As such, Malaysia does not want to lose its position as the leading and premier nation in promoting halal products. He said Matrade has maintained its strong commitment to achieving a minimum of five per cent export growth towards the RM1.58 trillion target for halal exports set for this year. 'That is a humble target. Of course there will be challenges but then InsyaAllah we hope that we can touch RM1.58 trillion this year,' he said. — Bernama
