Latest news with #RM3.9m
Yahoo
03-06-2025
- Business
- Yahoo
Sungei Bagan Rubber Company (Malaya) Berhad's (KLSE:SBAGAN) Promising Earnings May Rest On Soft Foundations
Unsurprisingly, Sungei Bagan Rubber Company (Malaya) Berhad's (KLSE:SBAGAN) stock price was strong on the back of its healthy earnings report. However, we think that shareholders may be missing some concerning details in the numbers. 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. 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. 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. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". For the year to March 2025, Sungei Bagan Rubber Company (Malaya) Berhad had an accrual ratio of 0.23. Unfortunately, that means its free cash flow fell significantly short of its reported profits. Indeed, in the last twelve months it reported free cash flow of RM3.9m, which is significantly less than its profit of RM164.5m. We note, however, that Sungei Bagan Rubber Company (Malaya) Berhad grew its free cash flow over the last year. Notably, the company has issued new shares, thus diluting existing shareholders and reducing their share of future earnings. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Sungei Bagan Rubber Company (Malaya) Berhad. To understand the value of a company's earnings growth, it is imperative to consider any dilution of shareholders' interests. In fact, Sungei Bagan Rubber Company (Malaya) Berhad increased the number of shares on issue by 40% over the last twelve months by issuing new shares. As a result, its net income is now split between a greater number of shares. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. Check out Sungei Bagan Rubber Company (Malaya) Berhad's historical EPS growth by clicking on this link. As you can see above, Sungei Bagan Rubber Company (Malaya) Berhad has been growing its net income over the last few years, with an annualized gain of 987% over three years. In comparison, earnings per share only gained 806% over the same period. And at a glance the 548% gain in profit over the last year impresses. But in comparison, EPS only increased by 439% over the same period. Therefore, one can observe that the dilution is having a fairly profound effect on shareholder returns. In the long term, earnings per share growth should beget share price growth. So Sungei Bagan Rubber Company (Malaya) Berhad shareholders will want to see that EPS figure continue to increase. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow. As it turns out, Sungei Bagan Rubber Company (Malaya) Berhad couldn't match its profit with cashflow and its dilution means that earnings per share growth is lagging net income growth. For the reasons mentioned above, we think that a perfunctory glance at Sungei Bagan Rubber Company (Malaya) Berhad's statutory profits might make it look better than it really is on an underlying level. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 2 warning signs for Sungei Bagan Rubber Company (Malaya) Berhad and you'll want to know about these. Our examination of Sungei Bagan Rubber Company (Malaya) Berhad has focussed on certain factors that can make its earnings look better than they are. And, on that basis, we are somewhat skeptical. 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. 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Yahoo
03-06-2025
- Business
- Yahoo
Sungei Bagan Rubber Company (Malaya) Berhad's (KLSE:SBAGAN) Promising Earnings May Rest On Soft Foundations
Unsurprisingly, Sungei Bagan Rubber Company (Malaya) Berhad's (KLSE:SBAGAN) stock price was strong on the back of its healthy earnings report. However, we think that shareholders may be missing some concerning details in the numbers. 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. 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. 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. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". For the year to March 2025, Sungei Bagan Rubber Company (Malaya) Berhad had an accrual ratio of 0.23. Unfortunately, that means its free cash flow fell significantly short of its reported profits. Indeed, in the last twelve months it reported free cash flow of RM3.9m, which is significantly less than its profit of RM164.5m. We note, however, that Sungei Bagan Rubber Company (Malaya) Berhad grew its free cash flow over the last year. Notably, the company has issued new shares, thus diluting existing shareholders and reducing their share of future earnings. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Sungei Bagan Rubber Company (Malaya) Berhad. To understand the value of a company's earnings growth, it is imperative to consider any dilution of shareholders' interests. In fact, Sungei Bagan Rubber Company (Malaya) Berhad increased the number of shares on issue by 40% over the last twelve months by issuing new shares. As a result, its net income is now split between a greater number of shares. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. Check out Sungei Bagan Rubber Company (Malaya) Berhad's historical EPS growth by clicking on this link. As you can see above, Sungei Bagan Rubber Company (Malaya) Berhad has been growing its net income over the last few years, with an annualized gain of 987% over three years. In comparison, earnings per share only gained 806% over the same period. And at a glance the 548% gain in profit over the last year impresses. But in comparison, EPS only increased by 439% over the same period. Therefore, one can observe that the dilution is having a fairly profound effect on shareholder returns. In the long term, earnings per share growth should beget share price growth. So Sungei Bagan Rubber Company (Malaya) Berhad shareholders will want to see that EPS figure continue to increase. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow. As it turns out, Sungei Bagan Rubber Company (Malaya) Berhad couldn't match its profit with cashflow and its dilution means that earnings per share growth is lagging net income growth. For the reasons mentioned above, we think that a perfunctory glance at Sungei Bagan Rubber Company (Malaya) Berhad's statutory profits might make it look better than it really is on an underlying level. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. You'd be interested to know, that we found 2 warning signs for Sungei Bagan Rubber Company (Malaya) Berhad and you'll want to know about these. Our examination of Sungei Bagan Rubber Company (Malaya) Berhad has focussed on certain factors that can make its earnings look better than they are. And, on that basis, we are somewhat skeptical. 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. 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Yahoo
04-04-2025
- Business
- Yahoo
There May Be Underlying Issues With The Quality Of Teck Guan Perdana Berhad's (KLSE:TECGUAN) Earnings
Teck Guan Perdana Berhad (KLSE:TECGUAN) just reported some strong earnings, and the market reacted accordingly with a healthy uplift in the share price. However, we think that shareholders may be missing some concerning details in the numbers. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit. 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'. 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. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. For the year to January 2025, Teck Guan Perdana Berhad had an accrual ratio of 0.29. Therefore, we know that it's free cashflow was significantly lower than its statutory profit, raising questions about how useful that profit figure really is. Even though it reported a profit of RM21.2m, a look at free cash flow indicates it actually burnt through RM3.9m in the last year. It's worth noting that Teck Guan Perdana Berhad generated positive FCF of RM11m a year ago, so at least they've done it in the past. The good news for shareholders is that Teck Guan Perdana 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. As a result, some shareholders may be looking for stronger cash conversion in the current year. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Teck Guan Perdana Berhad . Teck Guan Perdana Berhad didn't convert much of its profit to free cash flow in the last year, which some investors may consider rather suboptimal. Because of this, we think that it may be that Teck Guan Perdana Berhad's statutory profits are better than its underlying earnings power. But the happy news is that, while acknowledging we have to look beyond the statutory numbers, those numbers are still improving, with EPS growing at a very high rate over the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you'd like to know more about Teck Guan Perdana Berhad as a business, it's important to be aware of any risks it's facing. Every company has risks, and we've spotted 3 warning signs for Teck Guan Perdana Berhad (of which 1 makes us a bit uncomfortable!) you should know about. This note has only looked at a single factor that sheds light on the nature of Teck Guan Perdana 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.
Yahoo
19-03-2025
- Business
- Yahoo
Edelteq Holdings Berhad's (KLSE:EDELTEQ) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?
It is hard to get excited after looking at Edelteq Holdings Berhad's (KLSE:EDELTEQ) recent performance, when its stock has declined 19% over the past three months. 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 Edelteq Holdings 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. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. See our latest analysis for Edelteq Holdings Berhad Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Edelteq Holdings Berhad is: 7.9% = RM3.9m ÷ RM50m (Based on the trailing twelve months to December 2024). The 'return' is the profit over the last twelve months. That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.08 in profit. Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. On the face of it, Edelteq Holdings Berhad's ROE is not much to talk about. However, the fact that the company's ROE is higher than the average industry ROE of 4.6%, is definitely interesting. Having said that, Edelteq Holdings Berhad's net income growth over the past five years is more or less flat. Remember, the company's ROE is a bit low to begin with, just that it is higher than the industry average. So that could be one of the factors that are causing earnings growth to stay flat. We then performed a comparison between Edelteq Holdings Berhad's net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 1.5% in the same 5-year period. Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. Is Edelteq Holdings Berhad fairly valued compared to other companies? These 3 valuation measures might help you decide. On the whole, we do feel that Edelteq Holdings Berhad has some positive attributes. Particularly, its earnings have grown respectably as we saw earlier, which was likely achieved due to the company reinvesting most of its earnings at a decent rate of return, to grow its business. So far, we've only made a quick discussion around the company's earnings growth. So it may be worth checking this free detailed graph of Edelteq Holdings Berhad's past earnings, as well as revenue and cash flows to get a deeper insight into the company's performance. 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
