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Yahoo
a day ago
- Business
- Yahoo
Some Investors May Be Worried About Supercomnet Technologies Berhad's (KLSE:SCOMNET) Returns On Capital
To find a multi-bagger stock, what are the underlying trends we should look for in a business? 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. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after investigating Supercomnet Technologies Berhad (KLSE:SCOMNET), we don't think it's current trends fit the mold of a multi-bagger. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. 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. To calculate this metric for Supercomnet Technologies Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.082 = RM35m ÷ (RM447m - RM16m) (Based on the trailing twelve months to March 2025). Therefore, Supercomnet Technologies Berhad has an ROCE of 8.2%. Ultimately, that's a low return and it under-performs the Electrical industry average of 12%. Check out our latest analysis for Supercomnet Technologies Berhad Above you can see how the current ROCE for Supercomnet Technologies Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Supercomnet Technologies Berhad for free. On the surface, the trend of ROCE at Supercomnet Technologies Berhad doesn't inspire confidence. To be more specific, ROCE has fallen from 15% over the last five years. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It may take some time before the company starts to see any change in earnings from these investments. Bringing it all together, while we're somewhat encouraged by Supercomnet Technologies Berhad's reinvestment in its own business, we're aware that returns are shrinking. Additionally, the stock's total return to shareholders over the last five years has been flat, which isn't too surprising. All in all, the inherent trends aren't typical of multi-baggers, so if that's what you're after, we think you might have more luck elsewhere. Supercomnet Technologies Berhad could be trading at an attractive price in other respects, so you might find our on our platform quite valuable. While Supercomnet Technologies 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
08-05-2025
- Business
- Yahoo
JcbNext Berhad (KLSE:JCBNEXT) Posted Healthy Earnings But There Are Some Other Factors To Be Aware Of
Despite posting some strong earnings, the market for JcbNext Berhad's (KLSE:JCBNEXT) stock hasn't moved much. Our analysis suggests that shareholders have noticed something concerning 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. KLSE:JCBNEXT Earnings and Revenue History May 8th 2025 The Impact Of Unusual Items On Profit For anyone who wants to understand JcbNext Berhad's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit gained from RM35m worth of unusual items. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. JcbNext Berhad had a rather significant contribution from unusual items relative to its profit to December 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of JcbNext Berhad. Our Take On JcbNext Berhad's Profit Performance As previously mentioned, JcbNext Berhad's large boost from unusual items won't be there indefinitely, so its statutory earnings are probably a poor guide to its underlying profitability. For this reason, we think that JcbNext 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. But on the bright side, its earnings per share have grown at an extremely impressive rate over the last three years. 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. 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 4 warning signs for JcbNext Berhad and you'll want to know about these bad boys. Today we've zoomed in on a single data point to better understand the nature of JcbNext 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. 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) This 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
03-05-2025
- Business
- Yahoo
ITMAX System Berhad's (KLSE:ITMAX) Shareholders May Want To Dig Deeper Than Statutory Profit
ITMAX System Berhad's (KLSE:ITMAX) healthy profit numbers didn't contain any surprises for investors. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. 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. 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. This ratio tells us how much of a company's profit is not backed by free cashflow. As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. Over the twelve months to December 2024, ITMAX System Berhad recorded an accrual ratio of 0.42. 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. In the last twelve months it actually had negative free cash flow, with an outflow of RM15m despite its profit of RM80.4m, mentioned above. It's worth noting that ITMAX System Berhad generated positive FCF of RM35m a year ago, so at least they've done it in the past. 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. As we discussed above, we think ITMAX System Berhad's earnings were not supported by free cash flow, which might concern some investors. As a result, we think it may well be the case that ITMAX System Berhad's underlying earnings power is lower than its statutory profit. The good news is that, its earnings per share increased by 27% in 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. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of ITMAX System Berhad. Today we've zoomed in on a single data point to better understand the nature of ITMAX System 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. 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
27-03-2025
- Business
- Yahoo
Declining Stock and Solid Fundamentals: Is The Market Wrong About SDS Group Berhad (KLSE:SDS)?
It is hard to get excited after looking at SDS Group Berhad's (KLSE:SDS) recent performance, when its stock has declined 10.0% over the past three months. However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Particularly, we will be paying attention to SDS Group 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 other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. 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 SDS Group Berhad is: 24% = RM35m ÷ RM150m (Based on the trailing twelve months to December 2024). The 'return' refers to a company's earnings over the last year. That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.24 in profit. Check out our latest analysis for SDS Group Berhad So far, we've learned that ROE is a measure of a company's profitability. 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. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. To begin with, SDS Group Berhad has a pretty high ROE which is interesting. Second, a comparison with the average ROE reported by the industry of 8.8% also doesn't go unnoticed by us. So, the substantial 44% net income growth seen by SDS Group Berhad over the past five years isn't overly surprising. We then compared SDS Group Berhad's net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 15% in the same 5-year period. Earnings growth is a huge factor in stock valuation. 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. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if SDS Group Berhad is trading on a high P/E or a low P/E, relative to its industry. SDS Group Berhad's ' three-year median payout ratio is on the lower side at 19% implying that it is retaining a higher percentage (81%) of its profits. So it seems like the management is reinvesting profits heavily to grow its business and this reflects in its earnings growth number. Additionally, SDS Group Berhad has paid dividends over a period of four years which means that the company is pretty serious about sharing its profits with shareholders. On the whole, we feel that SDS Group Berhad's performance has been quite good. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. 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
19-03-2025
- Business
- Yahoo
Investors Will Want Oriental Food Industries Holdings Berhad's (KLSE:OFI) Growth In ROCE To Persist
What are the early trends we should look for to identify a stock that could multiply in value over the long term? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. So when we looked at Oriental Food Industries Holdings Berhad (KLSE:OFI) and its trend of ROCE, we really liked what we saw. 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. The formula for this calculation on Oriental Food Industries Holdings Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.18 = RM52m ÷ (RM325m - RM35m) (Based on the trailing twelve months to December 2024). Therefore, Oriental Food Industries Holdings Berhad has an ROCE of 18%. On its own, that's a standard return, however it's much better than the 9.3% generated by the Food industry. See our latest analysis for Oriental Food Industries Holdings Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Oriental Food Industries Holdings Berhad's ROCE against it's prior returns. If you'd like to look at how Oriental Food Industries Holdings Berhad has performed in the past in other metrics, you can view this free graph of Oriental Food Industries Holdings Berhad's past earnings, revenue and cash flow. Investors would be pleased with what's happening at Oriental Food Industries Holdings Berhad. The data shows that returns on capital have increased substantially over the last five years to 18%. Basically the business is earning more per dollar of capital invested and in addition to that, 36% more capital is being employed now too. This can indicate that there's plenty of opportunities to invest capital internally and at ever higher rates, a combination that's common among multi-baggers. 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 Oriental Food Industries Holdings Berhad has. Since the stock has returned a staggering 252% to shareholders over the last five years, it looks like investors are recognizing these changes. 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. If you'd like to know about the risks facing Oriental Food Industries Holdings Berhad, we've discovered 2 warning signs that you should be aware of. While Oriental Food Industries 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. Sign in to access your portfolio
