Latest news with #RM4.6m
Yahoo
27-05-2025
- Business
- Yahoo
Capital Allocation Trends At Smart Asia Chemical Bhd (KLSE:SMART) Aren't Ideal
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. 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. However, after investigating Smart Asia Chemical Bhd (KLSE:SMART), we don't think it's current trends fit the mold of a multi-bagger. 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. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. The formula for this calculation on Smart Asia Chemical Bhd is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.035 = RM4.6m ÷ (RM158m - RM28m) (Based on the trailing twelve months to December 2024). So, Smart Asia Chemical Bhd has an ROCE of 3.5%. Ultimately, that's a low return and it under-performs the Chemicals industry average of 8.0%. Check out our latest analysis for Smart Asia Chemical Bhd Historical performance is a great place to start when researching a stock so above you can see the gauge for Smart Asia Chemical Bhd's ROCE against it's prior returns. If you're interested in investigating Smart Asia Chemical Bhd's past further, check out this free graph covering Smart Asia Chemical Bhd's past earnings, revenue and cash flow. In terms of Smart Asia Chemical Bhd's historical ROCE movements, the trend isn't fantastic. Around four years ago the returns on capital were 19%, but since then they've fallen to 3.5%. 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. On a related note, Smart Asia Chemical Bhd has decreased its current liabilities to 18% 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. In summary, Smart Asia Chemical Bhd is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. And investors appear hesitant that the trends will pick up because the stock has fallen 52% in the last year. On the whole, we aren't too inspired by the underlying trends and we think there may be better chances of finding a multi-bagger elsewhere. One final note, you should learn about the 2 warning signs we've spotted with Smart Asia Chemical Bhd (including 1 which is a bit concerning) . 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. 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
Yahoo
27-05-2025
- Business
- Yahoo
Capital Allocation Trends At Smart Asia Chemical Bhd (KLSE:SMART) Aren't Ideal
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. 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. However, after investigating Smart Asia Chemical Bhd (KLSE:SMART), we don't think it's current trends fit the mold of a multi-bagger. 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. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. The formula for this calculation on Smart Asia Chemical Bhd is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.035 = RM4.6m ÷ (RM158m - RM28m) (Based on the trailing twelve months to December 2024). So, Smart Asia Chemical Bhd has an ROCE of 3.5%. Ultimately, that's a low return and it under-performs the Chemicals industry average of 8.0%. Check out our latest analysis for Smart Asia Chemical Bhd Historical performance is a great place to start when researching a stock so above you can see the gauge for Smart Asia Chemical Bhd's ROCE against it's prior returns. If you're interested in investigating Smart Asia Chemical Bhd's past further, check out this free graph covering Smart Asia Chemical Bhd's past earnings, revenue and cash flow. In terms of Smart Asia Chemical Bhd's historical ROCE movements, the trend isn't fantastic. Around four years ago the returns on capital were 19%, but since then they've fallen to 3.5%. 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. On a related note, Smart Asia Chemical Bhd has decreased its current liabilities to 18% 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. In summary, Smart Asia Chemical Bhd is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. And investors appear hesitant that the trends will pick up because the stock has fallen 52% in the last year. On the whole, we aren't too inspired by the underlying trends and we think there may be better chances of finding a multi-bagger elsewhere. One final note, you should learn about the 2 warning signs we've spotted with Smart Asia Chemical Bhd (including 1 which is a bit concerning) . 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. 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
Yahoo
09-05-2025
- Business
- Yahoo
Impressive Earnings May Not Tell The Whole Story For Radiant Globaltech Berhad (KLSE:RGTECH)
Radiant Globaltech Berhad (KLSE:RGTECH) announced strong profits, but the stock was stagnant. Our analysis suggests that shareholders have noticed something concerning in the numbers. We've discovered 2 warning signs about Radiant Globaltech Berhad. View them for free. 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. Radiant Globaltech Berhad has an accrual ratio of 0.27 for the year to December 2024. We can therefore deduce that its free cash flow fell well short of covering its statutory profit. Even though it reported a profit of RM8.01m, a look at free cash flow indicates it actually burnt through RM7.3m in the last year. We saw that FCF was RM4.6m a year ago though, so Radiant Globaltech 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. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Radiant Globaltech Berhad. One essential aspect of assessing earnings quality is to look at how much a company is diluting shareholders. In fact, Radiant Globaltech Berhad increased the number of shares on issue by 5.8% over the last twelve months by issuing new shares. Therefore, each share now receives a smaller portion of profit. 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 Radiant Globaltech Berhad's historical EPS growth by clicking on this link. Radiant Globaltech Berhad has improved its profit over the last three years, with an annualized gain of 9.2% in that time. And in the last year the company managed to bump profit up by 4.6%. On the other hand, earnings per share are only up 4.6% in that time. So you can see that the dilution has had a bit of an impact on shareholders. In the long term, earnings per share growth should beget share price growth. So it will certainly be a positive for shareholders if Radiant Globaltech Berhad can grow EPS persistently. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit. As it turns out, Radiant Globaltech Berhad couldn't match its profit with cashflow and its dilution means that earnings per share growth is lagging net income growth. Considering all this we'd argue Radiant Globaltech Berhad's profits probably give an overly generous impression of its sustainable level of profitability. So while earnings quality is important, it's equally important to consider the risks facing Radiant Globaltech Berhad at this point in time. To that end, you should learn about the 2 warning signs we've spotted with Radiant Globaltech Berhad (including 1 which is concerning). Our examination of Radiant Globaltech 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 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. 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
19-02-2025
- Business
- Yahoo
There Are Reasons To Feel Uneasy About Oceancash Pacific Berhad's (KLSE:OCNCASH) Returns On Capital
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding base of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. In light of that, when we looked at Oceancash Pacific Berhad (KLSE:OCNCASH) 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 Oceancash Pacific Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.035 = RM4.6m ÷ (RM146m - RM12m) (Based on the trailing twelve months to September 2024). Therefore, Oceancash Pacific Berhad has an ROCE of 3.5%. In absolute terms, that's a low return and it also under-performs the Luxury industry average of 8.2%. Check out our latest analysis for Oceancash Pacific Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for Oceancash Pacific Berhad's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Oceancash Pacific Berhad. On the surface, the trend of ROCE at Oceancash Pacific Berhad doesn't inspire confidence. Over the last five years, returns on capital have decreased to 3.5% from 9.1% five years ago. 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's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line. In summary, Oceancash Pacific Berhad is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. And in the last five years, the stock has given away 15% so the market doesn't look too hopeful on these trends strengthening any time soon. On the whole, we aren't too inspired by the underlying trends and we think there may be better chances of finding a multi-bagger elsewhere. One final note, you should learn about the 3 warning signs we've spotted with Oceancash Pacific Berhad (including 1 which makes us a bit uncomfortable) . 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. Sign in to access your portfolio
