Latest news with #RM12m
Yahoo
02-06-2025
- Business
- Yahoo
Sunsuria Berhad's (KLSE:SUNSURIA) Solid Earnings Have Been Accounted For Conservatively
Sunsuria Berhad's (KLSE:SUNSURIA) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. Our analysis suggests that shareholders might be missing some positive underlying factors in the earnings report. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. To properly understand Sunsuria Berhad's profit results, we need to consider the RM12m expense attributed to unusual items. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. If Sunsuria Berhad doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Unusual items (expenses) detracted from Sunsuria Berhad's earnings over the last year, but we might see an improvement next year. Because of this, we think Sunsuria Berhad's earnings potential is at least as good as it seems, and maybe even better! And on top of that, its earnings per share have grown at an extremely impressive rate over the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. When we did our research, we found 4 warning signs for Sunsuria Berhad (1 shouldn't be ignored!) that we believe deserve your full attention. This note has only looked at a single factor that sheds light on the nature of Sunsuria Berhad's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. 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 while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
Estimating The Intrinsic Value Of Timberwell Berhad (KLSE:TIMWELL)
Timberwell Berhad's estimated fair value is RM0.30 based on 2 Stage Free Cash Flow to Equity Current share price of RM0.33 suggests Timberwell Berhad is potentially trading close to its fair value Industry average of 1,545% suggests Timberwell Berhad's peers are currently trading at a higher premium to fair value How far off is Timberwell Berhad (KLSE:TIMWELL) 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 forecast future cash flows of the company and discounting them back to today's value. We will use the Discounted Cash Flow (DCF) model on this occasion. It may sound complicated, but actually it is quite simple! 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. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. 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. 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 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) RM1.05m RM1.35m RM1.63m RM1.88m RM2.11m RM2.31m RM2.49m RM2.66m RM2.81m RM2.95m Growth Rate Estimate Source Est @ 38.84% Est @ 28.28% Est @ 20.89% Est @ 15.71% Est @ 12.09% Est @ 9.56% Est @ 7.78% Est @ 6.54% Est @ 5.67% Est @ 5.06% Present Value (MYR, Millions) Discounted @ 11% RM0.9 RM1.1 RM1.2 RM1.2 RM1.3 RM1.2 RM1.2 RM1.2 RM1.1 RM1.0 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM12m 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. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (3.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 11%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM2.9m× (1 + 3.6%) ÷ (11%– 3.6%) = RM42m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM42m÷ ( 1 + 11%)10= RM15m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is RM27m. In the final step we divide the equity value by the number of shares outstanding. Compared 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. 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 Timberwell 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 11%, which is based on a levered beta of 1.221. 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 Timberwell Berhad Strength Debt is not viewed as a risk. Weakness Current share price is above our estimate of fair value. Opportunity Has sufficient cash runway for more than 3 years based on current free cash flows. Lack of analyst coverage makes it difficult to determine TIMWELL's earnings prospects. Threat No apparent threats visible for TIMWELL. 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. 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 Timberwell Berhad, we've put together three essential factors you should further research: Risks: As an example, we've found 3 warning signs for Timberwell Berhad that you need to consider before investing here. 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.
Yahoo
02-05-2025
- Business
- Yahoo
OCB Berhad's (KLSE:OCB) Soft Earnings Are Actually Better Than They Appear
The market for OCB Berhad's (KLSE:OCB) shares didn't move much after it posted weak earnings recently. We did some digging, and we believe the earnings are stronger than they seem. Our free stock report includes 5 warning signs investors should be aware of before investing in OCB Berhad. Read for free now. To properly understand OCB Berhad's profit results, we need to consider the RM12m expense attributed to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. OCB Berhad took a rather significant hit from unusual items in the year to December 2024. All else being equal, this would likely have the effect of making the statutory profit look worse than its underlying earnings power. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of OCB Berhad. As we discussed above, we think the significant unusual expense will make OCB Berhad's statutory profit lower than it would otherwise have been. Because of this, we think OCB Berhad's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! On the other hand, its EPS actually shrunk in the last twelve months. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. If you want to do dive deeper into OCB Berhad, you'd also look into what risks it is currently facing. Our analysis shows 5 warning signs for OCB Berhad (1 doesn't sit too well with us!) and we strongly recommend you look at them before investing. This note has only looked at a single factor that sheds light on the nature of OCB Berhad's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. 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
28-04-2025
- Business
- Yahoo
We Like These Underlying Return On Capital Trends At Negri Sembilan Oil Palms Berhad (KLSE:NSOP)
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Speaking of which, we noticed some great changes in Negri Sembilan Oil Palms Berhad's (KLSE:NSOP) returns on capital, so let's have a look. 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. For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. Analysts use this formula to calculate it for Negri Sembilan Oil Palms Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.042 = RM36m ÷ (RM860m - RM12m) (Based on the trailing twelve months to December 2024). Therefore, Negri Sembilan Oil Palms Berhad has an ROCE of 4.2%. In absolute terms, that's a low return and it also under-performs the Food industry average of 9.7%. View our latest analysis for Negri Sembilan Oil Palms Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Negri Sembilan Oil Palms Berhad's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Negri Sembilan Oil Palms Berhad. Negri Sembilan Oil Palms Berhad has broken into the black (profitability) and we're sure it's a sight for sore eyes. The company was generating losses five years ago, but has managed to turn it around and as we saw earlier is now earning 4.2%, which is always encouraging. On top of that, what's interesting is that the amount of capital being employed has remained steady, so the business hasn't needed to put any additional money to work to generate these higher returns. So while we're happy that the business is more efficient, just keep in mind that could mean that going forward the business is lacking areas to invest internally for growth. After all, a company can only become a long term multi-bagger if it continually reinvests in itself at high rates of return. In summary, we're delighted to see that Negri Sembilan Oil Palms Berhad has been able to increase efficiencies and earn higher rates of return on the same amount of capital. And a remarkable 120% total return over the last five years tells us that investors are expecting more good things to come in the future. So given the stock has proven it has promising trends, it's worth researching the company further to see if these trends are likely to persist. One more thing to note, we've identified 2 warning signs with Negri Sembilan Oil Palms Berhad and understanding these should be part of your investment process. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity. 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
01-04-2025
- Business
- Yahoo
Kawan Renergy Berhad's (KLSE:KENERGY) Promising Earnings May Rest On Soft Foundations
Unsurprisingly, Kawan Renergy Berhad's (KLSE:KENERGY) stock price was strong on the back of its healthy earnings report. We did some analysis and think that investors are missing some details hidden beneath the profit numbers. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking. For the year to January 2025, Kawan Renergy Berhad had an accrual ratio of 0.83. Statistically speaking, that's a real negative for future earnings. And indeed, during the period the company didn't produce any free cash flow whatsoever. Over the last year it actually had negative free cash flow of RM14m, in contrast to the aforementioned profit of RM18.7m. We saw that FCF was RM12m a year ago though, so Kawan Renergy Berhad has at least been able to generate positive FCF in the past. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Kawan Renergy Berhad. As we discussed above, we think Kawan Renergy Berhad's earnings were not supported by free cash flow, which might concern some investors. For this reason, we think that Kawan Renergy Berhad's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. In further bad news, its earnings per share decreased in the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. So while earnings quality is important, it's equally important to consider the risks facing Kawan Renergy Berhad at this point in time. When we did our research, we found 4 warning signs for Kawan Renergy Berhad (1 can't be ignored!) that we believe deserve your full attention. Today we've zoomed in on a single data point to better understand the nature of Kawan Renergy Berhad's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. 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
