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Yahoo
29-04-2025
- Business
- Yahoo
Investors Could Be Concerned With GDB Holdings Berhad's (KLSE:GDB) Returns On Capital
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. 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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Having said that, from a first glance at GDB Holdings Berhad (KLSE:GDB) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look. We've discovered 4 warning signs about GDB Holdings Berhad. View them for free. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for GDB Holdings Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.17 = RM33m ÷ (RM373m - RM177m) (Based on the trailing twelve months to December 2024). Therefore, GDB Holdings Berhad has an ROCE of 17%. On its own, that's a standard return, however it's much better than the 10.0% generated by the Construction industry. View our latest analysis for GDB Holdings 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 GDB Holdings Berhad has performed in the past in other metrics, you can view this free graph of GDB Holdings Berhad's past earnings, revenue and cash flow. In terms of GDB Holdings Berhad's historical ROCE movements, the trend isn't fantastic. Around five years ago the returns on capital were 27%, but since then they've fallen to 17%. And considering revenue has dropped while employing more capital, we'd be cautious. If this were to continue, you might be looking at a company that is trying to reinvest for growth but is actually losing market share since sales haven't increased. On a separate but related note, it's important to know that GDB Holdings Berhad has a current liabilities to total assets ratio of 47%, which we'd consider pretty high. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower. In summary, we're somewhat concerned by GDB Holdings Berhad's diminishing returns on increasing amounts of capital. Long term shareholders who've owned the stock over the last five years have experienced a 22% depreciation in their investment, so it appears the market might not like these trends either. Unless there is a shift to a more positive trajectory in these metrics, we would look elsewhere. If you'd like to know more about GDB Holdings Berhad, we've spotted 4 warning signs, and 2 of them can't be ignored. While GDB Holdings 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.
Yahoo
22-04-2025
- Business
- Yahoo
Here's What's Concerning About Cnergenz Berhad's (KLSE:CNERGEN) Returns On Capital
There are a few key trends to look for if we want to identify the next multi-bagger. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after briefly looking over the numbers, we don't think Cnergenz Berhad (KLSE:CNERGEN) has the makings of a multi-bagger going forward, but let's have a look at why that may be. Our free stock report includes 4 warning signs investors should be aware of before investing in Cnergenz Berhad. Read for free now. For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Cnergenz Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.061 = RM10m ÷ (RM199m - RM33m) (Based on the trailing twelve months to December 2024). So, Cnergenz Berhad has an ROCE of 6.1%. In absolute terms, that's a low return and it also under-performs the Electronic industry average of 12%. View our latest analysis for Cnergenz 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 Cnergenz Berhad has performed in the past in other metrics, you can view this free graph of Cnergenz Berhad's past earnings, revenue and cash flow. In terms of Cnergenz Berhad's historical ROCE movements, the trend isn't fantastic. Around five years ago the returns on capital were 48%, but since then they've fallen to 6.1%. Given the business is employing more capital while revenue has slipped, this is a bit concerning. This could mean that the business is losing its competitive advantage or market share, because while more money is being put into ventures, it's actually producing a lower return - "less bang for their buck" per se. On a related note, Cnergenz Berhad has decreased its current liabilities to 16% of total assets. That could partly explain why the ROCE has dropped. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Some would claim this reduces the business' efficiency at generating ROCE since it is now funding more of the operations with its own money. In summary, we're somewhat concerned by Cnergenz Berhad's diminishing returns on increasing amounts of capital. Long term shareholders who've owned the stock over the last year have experienced a 48% depreciation in their investment, so it appears the market might not like these trends either. With underlying trends that aren't great in these areas, we'd consider looking elsewhere. Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 4 warning signs for Cnergenz Berhad (of which 1 shouldn't be ignored!) that you should know about. While Cnergenz Berhad may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list 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. Sign in to access your portfolio
Yahoo
22-04-2025
- Business
- Yahoo
Here's What's Concerning About Cnergenz Berhad's (KLSE:CNERGEN) Returns On Capital
There are a few key trends to look for if we want to identify the next multi-bagger. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after briefly looking over the numbers, we don't think Cnergenz Berhad (KLSE:CNERGEN) has the makings of a multi-bagger going forward, but let's have a look at why that may be. Our free stock report includes 4 warning signs investors should be aware of before investing in Cnergenz Berhad. Read for free now. For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. Analysts use this formula to calculate it for Cnergenz Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.061 = RM10m ÷ (RM199m - RM33m) (Based on the trailing twelve months to December 2024). So, Cnergenz Berhad has an ROCE of 6.1%. In absolute terms, that's a low return and it also under-performs the Electronic industry average of 12%. View our latest analysis for Cnergenz 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 Cnergenz Berhad has performed in the past in other metrics, you can view this free graph of Cnergenz Berhad's past earnings, revenue and cash flow. In terms of Cnergenz Berhad's historical ROCE movements, the trend isn't fantastic. Around five years ago the returns on capital were 48%, but since then they've fallen to 6.1%. Given the business is employing more capital while revenue has slipped, this is a bit concerning. This could mean that the business is losing its competitive advantage or market share, because while more money is being put into ventures, it's actually producing a lower return - "less bang for their buck" per se. On a related note, Cnergenz Berhad has decreased its current liabilities to 16% of total assets. That could partly explain why the ROCE has dropped. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Some would claim this reduces the business' efficiency at generating ROCE since it is now funding more of the operations with its own money. In summary, we're somewhat concerned by Cnergenz Berhad's diminishing returns on increasing amounts of capital. Long term shareholders who've owned the stock over the last year have experienced a 48% depreciation in their investment, so it appears the market might not like these trends either. With underlying trends that aren't great in these areas, we'd consider looking elsewhere. Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 4 warning signs for Cnergenz Berhad (of which 1 shouldn't be ignored!) that you should know about. While Cnergenz Berhad may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list 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
17-04-2025
- Business
- Yahoo
Kinergy Advancement Berhad (KLSE:KAB) Will Be Hoping To Turn Its Returns On Capital Around
There are a few key trends to look for if we want to identify the next multi-bagger. 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. Having said that, from a first glance at Kinergy Advancement Berhad (KLSE:KAB) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look. Our free stock report includes 2 warning signs investors should be aware of before investing in Kinergy Advancement Berhad. Read for free now. If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Kinergy Advancement Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.082 = RM33m ÷ (RM521m - RM123m) (Based on the trailing twelve months to December 2024). So, Kinergy Advancement Berhad has an ROCE of 8.2%. In absolute terms, that's a low return but it's around the Construction industry average of 10.0%. Check out our latest analysis for Kinergy Advancement Berhad In the above chart we have measured Kinergy Advancement Berhad's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Kinergy Advancement Berhad . Unfortunately, the trend isn't great with ROCE falling from 19% five years ago, while capital employed has grown 393%. That being said, Kinergy Advancement Berhad raised some capital prior to their latest results being released, so that could partly explain the increase in capital employed. Kinergy Advancement Berhad probably hasn't received a full year of earnings yet from the new funds it raised, so these figures should be taken with a grain of salt. On a related note, Kinergy Advancement Berhad has decreased its current liabilities to 24% of total assets. That could partly explain why the ROCE has dropped. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Since the business is basically funding more of its operations with it's own money, you could argue this has made the business less efficient at generating ROCE. Even though returns on capital have fallen in the short term, we find it promising that revenue and capital employed have both increased for Kinergy Advancement Berhad. And there could be an opportunity here if other metrics look good too, because the stock has declined 27% in the last five years. As a result, we'd recommend researching this stock further to uncover what other fundamentals of the business can show us. Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 2 warning signs for Kinergy Advancement Berhad (of which 1 makes us a bit uncomfortable!) that you should know about. While Kinergy Advancement Berhad may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list 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. Sign in to access your portfolio
Yahoo
24-03-2025
- Business
- Yahoo
Here's What To Make Of Zhulian Corporation Berhad's (KLSE:ZHULIAN) Decelerating Rates Of Return
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount 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. Although, when we looked at Zhulian Corporation Berhad (KLSE:ZHULIAN), it didn't seem to tick all of these boxes. For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. The formula for this calculation on Zhulian Corporation Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.061 = RM26m ÷ (RM463m - RM33m) (Based on the trailing twelve months to November 2024). Thus, Zhulian Corporation Berhad has an ROCE of 6.1%. Ultimately, that's a low return and it under-performs the Luxury industry average of 10%. Check out our latest analysis for Zhulian Corporation 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 want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Zhulian Corporation Berhad. Over the past five years, Zhulian Corporation Berhad's ROCE has remained relatively flat while the business is using 30% less capital than before. When a company effectively decreases its assets base, it's not usually a sign to be optimistic on that company. Not only that, but the low returns on this capital mentioned earlier would leave most investors unimpressed. It's a shame to see that Zhulian Corporation Berhad is effectively shrinking in terms of its capital base. Since the stock has gained an impressive 77% over the last five years, investors must think there's better things to come. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn't high. Since virtually every company faces some risks, it's worth knowing what they are, and we've spotted 2 warning signs for Zhulian Corporation Berhad (of which 1 is significant!) that you should know about. While Zhulian Corporation Berhad may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list 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. Sign in to access your portfolio
