Latest news with #RM19m
Yahoo
6 days ago
- Business
- Yahoo
Solid Earnings May Not Tell The Whole Story For Rex Industry Berhad (KLSE:REX)
Rex Industry Berhad's (KLSE:REX) robust recent earnings didn't do much to move the stock. We think this is due to investors looking beyond the statutory profits and being concerned with what they see. 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. 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'. As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. 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. Rex Industry Berhad has an accrual ratio of 0.26 for the year to March 2025. Unfortunately, that means its free cash flow fell significantly short of its reported profits. Even though it reported a profit of RM6.33m, a look at free cash flow indicates it actually burnt through RM19m in the last year. It's worth noting that Rex Industry Berhad generated positive FCF of RM4.1m a year ago, so at least they've done it in the past. The good news for shareholders is that Rex Industry Berhad's accrual ratio was much better last year, so this year's poor reading might simply be a case of a short term mismatch between profit and FCF. Shareholders should look for improved cashflow relative to profit in the current year, if that is indeed the case. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Rex Industry Berhad. Rex Industry Berhad didn't convert much of its profit to free cash flow in the last year, which some investors may consider rather suboptimal. Therefore, it seems possible to us that Rex Industry Berhad's true underlying earnings power is actually less than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money 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 Rex Industry Berhad at this point in time. To that end, you should learn about the 3 warning signs we've spotted with Rex Industry Berhad (including 1 which is concerning). Today we've zoomed in on a single data point to better understand the nature of Rex Industry 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.
Yahoo
21-05-2025
- Business
- Yahoo
Returns At Karyon Industries Berhad (KLSE:KARYON) Appear To Be Weighed Down
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. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. However, after investigating Karyon Industries Berhad (KLSE:KARYON), we don't think it's current trends fit the mold of a multi-bagger. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for Karyon Industries Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.093 = RM13m ÷ (RM156m - RM19m) (Based on the trailing twelve months to December 2024). So, Karyon Industries Berhad has an ROCE of 9.3%. In absolute terms, that's a low return but it's around the Chemicals industry average of 8.0%. View our latest analysis for Karyon Industries 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 Karyon Industries Berhad has performed in the past in other metrics, you can view this free graph of Karyon Industries Berhad's past earnings, revenue and cash flow. In terms of Karyon Industries Berhad's historical ROCE trend, it doesn't exactly demand attention. The company has employed 21% more capital in the last five years, and the returns on that capital have remained stable at 9.3%. Given the company has increased the amount of capital employed, it appears the investments that have been made simply don't provide a high return on capital. As we've seen above, Karyon Industries Berhad's returns on capital haven't increased but it is reinvesting in the business. Unsurprisingly then, the total return to shareholders over the last five years has been flat. Therefore based on the analysis done in this article, we don't think Karyon Industries Berhad has the makings of a multi-bagger. If you'd like to know about the risks facing Karyon Industries Berhad, we've discovered 2 warning signs that you should be aware of. While Karyon Industries 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
31-03-2025
- Business
- Yahoo
IFCA MSC Berhad's (KLSE:IFCAMSC) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?
With its stock down 33% over the past three months, it is easy to disregard IFCA MSC Berhad (KLSE:IFCAMSC). However, the company's fundamentals look pretty decent, and long-term financials are usually aligned with future market price movements. Particularly, we will be paying attention to IFCA MSC Berhad's ROE today. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Put another way, it reveals the company's success at turning shareholder investments into profits. The formula for return on equity is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for IFCA MSC Berhad is: 15% = RM19m ÷ RM124m (Based on the trailing twelve months to December 2024). The 'return' is the income the business earned over the last year. So, this means that for every MYR1 of its shareholder's investments, the company generates a profit of MYR0.15. Check out our latest analysis for IFCA MSC Berhad Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. At first glance, IFCA MSC Berhad seems to have a decent ROE. And on comparing with the industry, we found that the the average industry ROE is similar at 15%. However, we are curious as to how IFCA MSC Berhad's decent returns still resulted in flat growth for IFCA MSC Berhad in the past five years. Based on this, we feel that there might be other reasons which haven't been discussed so far in this article that could be hampering the company's growth. Such as, the company pays out a huge portion of its earnings as dividends, or is faced with competitive pressures. As a next step, we compared IFCA MSC Berhad's net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 16% in the same period. Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. If you're wondering about IFCA MSC Berhad's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. IFCA MSC Berhad has a high three-year median payout ratio of 83% (or a retention ratio of 17%), meaning that the company is paying most of its profits as dividends to its shareholders. This does go some way in explaining why there's been no growth in its earnings. Additionally, IFCA MSC Berhad has paid dividends over a period of at least ten years, which means that the company's management is determined to pay dividends even if it means little to no earnings growth. Overall, we feel that IFCA MSC Berhad certainly does have some positive factors to consider. Yet, the low earnings growth is a bit concerning, especially given that the company has a high rate of return. Investors could have benefitted from the high ROE, had the company been reinvesting more of its earnings. As discussed earlier, the company is retaining a small portion of its profits. Up till now, we've only made a short study of the company's growth data. You can do your own research on IFCA MSC Berhad and see how it has performed in the past by looking at this FREE detailed graph of past earnings, revenue and cash flows. 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
27-03-2025
- Business
- Yahoo
Elridge Energy Holdings Berhad's (KLSE:ELRIDGE) Promising Earnings May Rest On Soft Foundations
Elridge Energy Holdings Berhad (KLSE:ELRIDGE) announced strong profits, but the stock was stagnant. Our analysis suggests that shareholders have noticed something concerning in the numbers. 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. Many investors haven't heard of the accrual ratio from cashflow, but it is actually a useful measure of how well a company's profit is backed up by free cash flow (FCF) during a given period. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. 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. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. Elridge Energy Holdings Berhad has an accrual ratio of 0.72 for the year to December 2024. As a general rule, that bodes poorly for future profitability. 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 RM1.7m, in contrast to the aforementioned profit of RM41.2m. It's worth noting that Elridge Energy Holdings Berhad generated positive FCF of RM19m a year ago, so at least they've done it in the past. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Elridge Energy Holdings Berhad. As we discussed above, we think Elridge Energy Holdings Berhad's earnings were not supported by free cash flow, which might concern some investors. For this reason, we think that Elridge Energy Holdings 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. Sadly, its EPS was down over the last twelve months. 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. For example - Elridge Energy Holdings Berhad has 1 warning sign we think you should be aware of. This note has only looked at a single factor that sheds light on the nature of Elridge Energy Holdings Berhad's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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. 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
10-03-2025
- Business
- Yahoo
Under The Bonnet, Jati Tinggi Group Berhad's (KLSE:JTGROUP) Returns Look Impressive
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. So when we looked at the ROCE trend of Jati Tinggi Group Berhad (KLSE:JTGROUP) we really liked what we saw. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for Jati Tinggi Group Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.28 = RM19m ÷ (RM137m - RM70m) (Based on the trailing twelve months to November 2024). So, Jati Tinggi Group Berhad has an ROCE of 28%. That's a fantastic return and not only that, it outpaces the average of 8.9% earned by companies in a similar industry. Check out our latest analysis for Jati Tinggi Group Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Jati Tinggi Group 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 Jati Tinggi Group Berhad. The trends we've noticed at Jati Tinggi Group Berhad are quite reassuring. Over the last five years, returns on capital employed have risen substantially to 28%. Basically the business is earning more per dollar of capital invested and in addition to that, 253% more capital is being employed now too. The increasing returns on a growing amount of capital is common amongst multi-baggers and that's why we're impressed. In another part of our analysis, we noticed that the company's ratio of current liabilities to total assets decreased to 51%, which broadly means the business is relying less on its suppliers or short-term creditors to fund its operations. Therefore we can rest assured that the growth in ROCE is a result of the business' fundamental improvements, rather than a cooking class featuring this company's books. Nevertheless, there are some potential risks the company is bearing with current liabilities that high, so just keep that in mind. A company that is growing its returns on capital and can consistently reinvest in itself is a highly sought after trait, and that's what Jati Tinggi Group Berhad has. Considering the stock has delivered 4.8% to its stockholders over the last year, it may be fair to think that investors aren't fully aware of the promising trends yet. So with that in mind, we think the stock deserves further research. One final note, you should learn about the 3 warning signs we've spotted with Jati Tinggi Group Berhad (including 1 which can't be ignored) . If you want to search for more stocks that have been earning high returns, check out this free list of stocks with solid balance sheets that are also earning 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.
