Latest news with #RM37m
Yahoo
13-05-2025
- Business
- Yahoo
HSS Engineers Berhad (KLSE:HSSEB) Is Experiencing Growth In Returns On Capital
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. 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. Speaking of which, we noticed some great changes in HSS Engineers Berhad's (KLSE:HSSEB) returns on capital, so let's have a look. Our free stock report includes 1 warning sign investors should be aware of before investing in HSS Engineers Berhad. Read for free now. 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. Analysts use this formula to calculate it for HSS Engineers Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.12 = RM37m ÷ (RM419m - RM123m) (Based on the trailing twelve months to December 2024). Thus, HSS Engineers Berhad has an ROCE of 12%. In absolute terms, that's a satisfactory return, but compared to the Construction industry average of 8.2% it's much better. Check out our latest analysis for HSS Engineers Berhad In the above chart we have measured HSS Engineers 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 HSS Engineers Berhad . HSS Engineers Berhad has not disappointed with their ROCE growth. Looking at the data, we can see that even though capital employed in the business has remained relatively flat, the ROCE generated has risen by 314% over the last five years. Basically the business is generating higher returns from the same amount of capital and that is proof that there are improvements in the company's efficiencies. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward. On a side note, we noticed that the improvement in ROCE appears to be partly fueled by an increase in current liabilities. Effectively this means that suppliers or short-term creditors are now funding 29% of the business, which is more than it was five years ago. Keep an eye out for future increases because when the ratio of current liabilities to total assets gets particularly high, this can introduce some new risks for the business. In summary, we're delighted to see that HSS Engineers Berhad has been able to increase efficiencies and earn higher rates of return on the same amount of capital. Investors may not be impressed by the favorable underlying trends yet because over the last five years the stock has only returned 39% to shareholders. Given that, we'd look further into this stock in case it has more traits that could make it multiply in the long term. On a separate note, we've found 1 warning sign for HSS Engineers Berhad you'll probably want to know about. While HSS Engineers 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
13-05-2025
- Business
- Yahoo
HSS Engineers Berhad (KLSE:HSSEB) Is Experiencing Growth In Returns On Capital
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. 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. Speaking of which, we noticed some great changes in HSS Engineers Berhad's (KLSE:HSSEB) returns on capital, so let's have a look. Our free stock report includes 1 warning sign investors should be aware of before investing in HSS Engineers Berhad. Read for free now. 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. Analysts use this formula to calculate it for HSS Engineers Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.12 = RM37m ÷ (RM419m - RM123m) (Based on the trailing twelve months to December 2024). Thus, HSS Engineers Berhad has an ROCE of 12%. In absolute terms, that's a satisfactory return, but compared to the Construction industry average of 8.2% it's much better. Check out our latest analysis for HSS Engineers Berhad In the above chart we have measured HSS Engineers 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 HSS Engineers Berhad . HSS Engineers Berhad has not disappointed with their ROCE growth. Looking at the data, we can see that even though capital employed in the business has remained relatively flat, the ROCE generated has risen by 314% over the last five years. Basically the business is generating higher returns from the same amount of capital and that is proof that there are improvements in the company's efficiencies. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward. On a side note, we noticed that the improvement in ROCE appears to be partly fueled by an increase in current liabilities. Effectively this means that suppliers or short-term creditors are now funding 29% of the business, which is more than it was five years ago. Keep an eye out for future increases because when the ratio of current liabilities to total assets gets particularly high, this can introduce some new risks for the business. In summary, we're delighted to see that HSS Engineers Berhad has been able to increase efficiencies and earn higher rates of return on the same amount of capital. Investors may not be impressed by the favorable underlying trends yet because over the last five years the stock has only returned 39% to shareholders. Given that, we'd look further into this stock in case it has more traits that could make it multiply in the long term. On a separate note, we've found 1 warning sign for HSS Engineers Berhad you'll probably want to know about. While HSS Engineers 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
08-05-2025
- Business
- Yahoo
Southern Cable Group Berhad (KLSE:SCGBHD) Posted Healthy Earnings But There Are Some Other Factors To Be Aware Of
Southern Cable Group Berhad's (KLSE:SCGBHD) robust earnings report didn't manage to move the market for its stock. Our analysis suggests that this might be because shareholders have noticed some concerning underlying factors. Our free stock report includes 3 warning signs investors should be aware of before investing in Southern Cable Group Berhad. Read for free now. KLSE:SCGBHD Earnings and Revenue History May 8th 2025 Examining Cashflow Against Southern Cable Group Berhad's Earnings 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. The ratio shows us how much a company's profit exceeds its FCF. 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. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking. Southern Cable Group Berhad has an accrual ratio of 0.23 for the year to December 2024. Therefore, we know that it's free cashflow was significantly lower than its statutory profit, which is hardly a good thing. Even though it reported a profit of RM72.3m, a look at free cash flow indicates it actually burnt through RM37m in the last year. We saw that FCF was RM115m a year ago though, so Southern Cable Group Berhad has at least been able to generate positive FCF in the past. Unfortunately for shareholders, the company has also been issuing new shares, diluting their share of future earnings. The good news for shareholders is that Southern Cable Group 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. 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. One essential aspect of assessing earnings quality is to look at how much a company is diluting shareholders. Southern Cable Group Berhad expanded the number of shares on issue by 16% over the last year. As a result, its net income is now split between a greater number of shares. To celebrate net income while ignoring dilution is like rejoicing because you have a single slice of a larger pizza, but ignoring the fact that the pizza is now cut into many more slices. You can see a chart of Southern Cable Group Berhad's EPS by clicking here.
Yahoo
05-04-2025
- Automotive
- Yahoo
Solid Automotive Berhad's (KLSE:SOLID) Earnings Are Weaker Than They Seem
Despite posting some strong earnings, the market for Solid Automotive Berhad's (KLSE:SOLID) stock hasn't moved much. We did some digging, and we found some concerning factors in the details. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. 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). In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. 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. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking. For the year to January 2025, Solid Automotive Berhad had an accrual ratio of 0.32. 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. In the last twelve months it actually had negative free cash flow, with an outflow of RM24m despite its profit of RM39.3m, mentioned above. It's worth noting that Solid Automotive Berhad generated positive FCF of RM37m a year ago, so at least they've done it in the past. One positive for Solid Automotive Berhad shareholders is that it's accrual ratio was significantly better last year, providing reason to believe that it may return to stronger cash conversion in the future. 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 Solid Automotive Berhad . Solid Automotive 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 Solid Automotive Berhad's statutory profits are better than its underlying earnings power. 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. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. To that end, you should learn about the 3 warning signs we've spotted with Solid Automotive Berhad (including 1 which is significant) . This note has only looked at a single factor that sheds light on the nature of Solid Automotive 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
Capital Allocation Trends At Fiamma Holdings Berhad (KLSE:FIAMMA) Aren't Ideal
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? 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. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. In light of that, when we looked at Fiamma Holdings Berhad (KLSE:FIAMMA) and its ROCE trend, we weren't exactly thrilled. 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 Fiamma Holdings Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.048 = RM37m ÷ (RM1.0b - RM254m) (Based on the trailing twelve months to December 2024). Thus, Fiamma Holdings Berhad has an ROCE of 4.8%. Even though it's in line with the industry average of 4.8%, it's still a low return by itself. See our latest analysis for Fiamma 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 Fiamma Holdings Berhad has performed in the past in other metrics, you can view this free graph of Fiamma Holdings Berhad's past earnings, revenue and cash flow. Unfortunately, the trend isn't great with ROCE falling from 8.0% five years ago, while capital employed has grown 32%. Usually this isn't ideal, but given Fiamma Holdings Berhad conducted a capital raising before their most recent earnings announcement, that would've likely contributed, at least partially, to the increased capital employed figure. The funds raised likely haven't been put to work yet so it's worth watching what happens in the future with Fiamma Holdings Berhad's earnings and if they change as a result from the capital raise. To conclude, we've found that Fiamma Holdings Berhad is reinvesting in the business, but returns have been falling. Yet to long term shareholders the stock has gifted them an incredible 174% return in the last five years, so the market appears to be rosy about its future. But if the trajectory of these underlying trends continue, we think the likelihood of it being a multi-bagger from here isn't high. Like most companies, Fiamma Holdings Berhad does come with some risks, and we've found 1 warning sign that you should be aware of. For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and 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.
