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Yahoo
28-05-2025
- Business
- Yahoo
Estimating The Intrinsic Value Of Apex Healthcare Berhad (KLSE:AHEALTH)
The projected fair value for Apex Healthcare Berhad is RM2.28 based on 2 Stage Free Cash Flow to Equity Current share price of RM2.12 suggests Apex Healthcare Berhad is potentially trading close to its fair value Our fair value estimate is 7.5% lower than Apex Healthcare Berhad's analyst price target of RM2.47 Does the May share price for Apex Healthcare Berhad (KLSE:AHEALTH) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example! Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you still have some burning questions about this type of valuation, take a look at 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 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, 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) RM66.1m RM72.6m RM78.4m RM83.6m RM88.5m RM93.0m RM97.4m RM101.6m RM105.8m RM110.1m Growth Rate Estimate Source Est @ 12.54% Est @ 9.87% Est @ 8.00% Est @ 6.69% Est @ 5.78% Est @ 5.14% Est @ 4.69% Est @ 4.37% Est @ 4.15% Est @ 4.00% Present Value (MYR, Millions) Discounted @ 8.4% RM60.9 RM61.8 RM61.6 RM60.6 RM59.1 RM57.4 RM55.4 RM53.4 RM51.3 RM49.2 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM571m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. 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 8.4%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM110m× (1 + 3.6%) ÷ (8.4%– 3.6%) = RM2.4b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM2.4b÷ ( 1 + 8.4%)10= RM1.1b 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 RM1.6b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of RM2.1, the company appears about fair value at a 7.2% 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. 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 Apex Healthcare 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. Check out our latest analysis for Apex Healthcare Berhad Strength Debt is not viewed as a risk. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Pharmaceuticals market. 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 cash flow. Annual revenue is forecast to grow slower than the Malaysian market. Although the valuation of a company is important, it shouldn't be the only metric you look at when researching 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. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Apex Healthcare Berhad, we've compiled three relevant elements you should assess: Risks: Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Apex Healthcare Berhad , and understanding them should be part of your investment process. Future Earnings: How does AHEALTH'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. 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
Free Malaysia Today
30-04-2025
- Business
- Free Malaysia Today
PTPTN declares 4.05% dividend for Simpan SSPN scheme, highest in a decade
Higher education minister Zambry Abdul Kadir (second from left) and PTPTN CEO Norliza Abdul Rahim (left) holding up the placards announcing the Simpan SSPN dividends. (PTPTN pic) PUTRAJAYA : The National Higher Education Fund Corporation (PTPTN) has declared a 4.05% dividend for Simpan SSPN for 2024, the highest rate recorded in the last 10 years. Higher education minister Zambry Abdul Kadir said the dividend, which involves a total distribution of RM439.87 million, would benefit some 6.77 million depositors. He said since the scheme was introduced in 2004, the total dividends distributed came up to RM2.12 billion. In 2023, PTPTN declared a dividend of 3.60%. Zambry said the dividend declared in 2024 highlighted PTPTN's efficiency in managing funds to ensure optimum returns for its clients. He said the increase in dividends was also due to long and short-term shariah-compliant investment strategies which not only ensure higher returns but were inline with its principles. 'The declaration of a 4.05% dividend also highlights a positive return of investment when compared with the 3.0% overnight policy rate set by Bank Negara Malaysia,' he said when announcing Simpan SSPN dividends for 2024 and launching the Ganjaran Kesetiaan Simpan SSPN Prime 2025, here. Also present were deputy minister of higher education Mustapha Sakmud, PTPTN chairman Norliza Abdul Rahim and the fund's CEO Ahmad Dasuki Abdul Majid. According to PTPTN, the dividends will be banked directly into the Simpan SSPN accounts and depositors can check their statements via the myPTPTN app from May 2 onwards. Last year, Simpan SSPN received total deposits of RM3.17 billion, while over 500,000 new accounts were opened. 'The figure represents an increase of RM24.37 million or 0.77% compared to the RM3.15 billion declared in 2023. 'The total deposits collected as of Dec 31, 2024 was RM20.56 billion involving some 6.77 million accounts. It is an achievement to be proud of as well as proof that the public support for the SSPN scheme remains strong.'
Barnama
30-04-2025
- Business
- Barnama
PTPTN Declares 4.05 Pct Dividend For SSPN Savers In 2024, Highest In A Decade
PUTRAJAYA, April 30 (Bernama) -- The National Higher Education Fund Corporation (PTPTN) today announced a 4.05 per cent dividend payout for the National Education Savings Scheme (Simpan SSPN) for 2024, the highest rate in a decade. Higher Education Minister Datuk Seri Dr Zambry Abd Kadir said the dividend distribution involves an allocation of RM439.87 million, benefiting approximately 6.77 million Simpan SSPN depositors. 'The dividend will be credited directly into depositors' accounts, and they can check their statements via the myPTPTN app from this Friday. 'This brings the total cumulative dividends since Simpan SSPN's introduction in 2004 to RM2.12 billion,' he said at the Simpan SSPN 2024 dividend announcement ceremony here today. Also present were Deputy Higher Education Minister Datuk Mustapa Sakmud, PTPTN chairman Datuk Seri Norliza Abdul Rahim and PTPTN chief executive Ahmad Dasuki Abdul Majid. Zambry said the 2024 dividend of 4.05 per cent is higher than the 3.60 per cent paid out in 2023. He said Simpan SSPN recorded RM3.17 billion in deposits this year, with over 500,000 new accounts opened. Cumulative deposits since 2004 until Dec 31, 2024, stood at RM20.56 billion across 6.77 million accounts. 'This growth is driven by syariah-compliant short and long-term investments in domestic money markets, safeguarding principal while delivering high, positive returns,' he said, adding that this reflects PTPTN's efficiency in managing savings funds based on excellent, integrity-driven and strategic governance. At the same event, Zambry introduced the Simpan SSPN Prime Loyalty Reward Campaign 2025, offering an additional one per cent bonus to depositors who save a minimum of RM1,000 during the promotion period from May 1 to July 31.
