Latest news with #RM44m
Yahoo
01-04-2025
- Business
- Yahoo
Binastra Corporation Berhad's (KLSE:BNASTRA) Profits May Be Overstating Its True Earnings Potential
Solid profit numbers didn't seem to be enough to please Binastra Corporation Berhad's (KLSE:BNASTRA) shareholders. Our analysis suggests they may be concerned about some underlying details. 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. The ratio shows us how much a company's profit exceeds its FCF. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. 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. 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, Binastra Corporation Berhad had an accrual ratio of 0.90. Statistically speaking, that's a real negative for future earnings. To wit, the company did not generate one whit of free cashflow in that time. In the last twelve months it actually had negative free cash flow, with an outflow of RM44m despite its profit of RM90.3m, mentioned above. It's worth noting that Binastra Corporation Berhad generated positive FCF of RM3.0m a year ago, so at least they've done it in the past. Notably, the company has issued new shares, thus diluting existing shareholders and reducing their share of future earnings. 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. In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. In fact, Binastra Corporation Berhad increased the number of shares on issue by 20% over the last twelve months by issuing new shares. Therefore, each share now receives a smaller portion of profit. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. Check out Binastra Corporation Berhad's historical EPS growth by clicking on this link. As you can see above, Binastra Corporation Berhad has been growing its net income over the last few years, with an annualized gain of 1,751% over three years. But EPS was only up 499% per year, in the exact same period. And at a glance the 117% gain in profit over the last year impresses. But in comparison, EPS only increased by 101% over the same period. And so, you can see quite clearly that dilution is influencing shareholder earnings. Changes in the share price do tend to reflect changes in earnings per share, in the long run. So it will certainly be a positive for shareholders if Binastra Corporation Berhad can grow EPS persistently. 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, Binastra Corporation 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 Binastra Corporation Berhad's profits probably give an overly generous impression of its sustainable level of profitability. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Our analysis shows 2 warning signs for Binastra Corporation Berhad (1 is potentially serious!) and we strongly recommend you look at these before investing. Our examination of Binastra Corporation 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.
Yahoo
20-03-2025
- Business
- Yahoo
Some Investors May Be Worried About PMB Technology Berhad's (KLSE:PMBTECH) Returns On Capital
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base 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 PMB Technology Berhad (KLSE:PMBTECH) has the makings of a multi-bagger going forward, but let's have a look at why that may be. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list 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. The formula for this calculation on PMB Technology Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.026 = RM44m ÷ (RM2.4b - RM760m) (Based on the trailing twelve months to December 2024). Therefore, PMB Technology Berhad has an ROCE of 2.6%. In absolute terms, that's a low return and it also under-performs the Metals and Mining industry average of 5.8%. View our latest analysis for PMB Technology Berhad Above you can see how the current ROCE for PMB Technology Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for PMB Technology Berhad . The trend of ROCE doesn't look fantastic because it's fallen from 3.6% five years ago, while the business's capital employed increased by 108%. That being said, PMB Technology Berhad raised some capital prior to their latest results being released, so that could partly explain the increase in capital employed. It's unlikely that all of the funds raised have been put to work yet, so as a consequence PMB Technology Berhad might not have received a full period of earnings contribution from it. In summary, PMB Technology Berhad is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet. Yet to long term shareholders the stock has gifted them an incredible 200% return in the last five years, so the market appears to be rosy about its future. Ultimately, if the underlying trends persist, we wouldn't hold our breath on it being a multi-bagger going forward. One final note, you should learn about the 4 warning signs we've spotted with PMB Technology Berhad (including 2 which are potentially serious) . While PMB Technology 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
Yahoo
19-03-2025
- Business
- Yahoo
Harrisons Holdings (Malaysia) Berhad (KLSE:HARISON) Stock's Been Sliding But Fundamentals Look Decent: Will The Market Correct The Share Price In The Future?
With its stock down 5.8% over the past three months, it is easy to disregard Harrisons Holdings (Malaysia) Berhad (KLSE:HARISON). However, stock prices are usually driven by a company's financials over the long term, which in this case look pretty respectable. Specifically, we decided to study Harrisons Holdings (Malaysia) Berhad's ROE in this article. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Put another way, it reveals the company's success at turning shareholder investments into profits. Check out our latest analysis for Harrisons Holdings (Malaysia) Berhad The formula for return on equity is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Harrisons Holdings (Malaysia) Berhad is: 9.5% = RM44m ÷ RM463m (Based on the trailing twelve months to December 2024). The 'return' is the profit over the last twelve months. So, this means that for every MYR1 of its shareholder's investments, the company generates a profit of MYR0.09. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. 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, Harrisons Holdings (Malaysia) Berhad's ROE is not much to talk about. However, given that the company's ROE is similar to the average industry ROE of 8.2%, we may spare it some thought. Having said that, Harrisons Holdings (Malaysia) Berhad has shown a modest net income growth of 18% over the past five years. Given the slightly low ROE, it is likely that there could be some other aspects that are driving this growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. Next, on comparing with the industry net income growth, we found that Harrisons Holdings (Malaysia) Berhad's growth is quite high when compared to the industry average growth of 10% in the same period, which is great to see. Earnings growth is an important metric to consider when valuing a stock. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. Is Harrisons Holdings (Malaysia) Berhad fairly valued compared to other companies? These 3 valuation measures might help you decide. Harrisons Holdings (Malaysia) Berhad has a three-year median payout ratio of 50%, which implies that it retains the remaining 50% of its profits. This suggests that its dividend is well covered, and given the decent growth seen by the company, it looks like management is reinvesting its earnings efficiently. Besides, Harrisons Holdings (Malaysia) Berhad has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Overall, we feel that Harrisons Holdings (Malaysia) Berhad certainly does have some positive factors to consider. With a high rate of reinvestment, albeit at a low ROE, the company has managed to see a considerable growth in its earnings. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. To know the 2 risks we have identified for Harrisons Holdings (Malaysia) Berhad visit our risks dashboard for free. 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
08-03-2025
- Business
- Yahoo
Ecomate Holdings Berhad's (KLSE:ECOMATE) Financials Are Too Obscure To Link With Current Share Price Momentum: What's In Store For the Stock?
Most readers would already be aware that Ecomate Holdings Berhad's (KLSE:ECOMATE) stock increased significantly by 16% over the past three months. But the company's key financial indicators appear to be differing across the board and that makes us question whether or not the company's current share price momentum can be maintained. Particularly, we will be paying attention to Ecomate 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 short, ROE shows the profit each dollar generates with respect to its shareholder investments. View our latest analysis for Ecomate 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 Ecomate Holdings Berhad is: 2.4% = RM1.0m ÷ RM44m (Based on the trailing twelve months to November 2024). The 'return' is the yearly profit. Another way to think of that is that for every MYR1 worth of equity, the company was able to earn MYR0.02 in profit. 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. 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. As you can see, Ecomate Holdings Berhad's ROE looks pretty weak. Not just that, even compared to the industry average of 5.6%, the company's ROE is entirely unremarkable. For this reason, Ecomate Holdings Berhad's five year net income decline of 35% is not surprising given its lower ROE. However, there could also be other factors causing the earnings to decline. Such as - low earnings retention or poor allocation of capital. So, as a next step, we compared Ecomate Holdings Berhad's performance against the industry and were disappointed to discover that while the company has been shrinking its earnings, the industry has been growing its earnings at a rate of 7.3% over the last few years. Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. 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 Ecomate Holdings Berhad is trading on a high P/E or a low P/E, relative to its industry. In spite of a normal three-year median payout ratio of 25% (that is, a retention ratio of 75%), the fact that Ecomate Holdings Berhad's earnings have shrunk is quite puzzling. So there could be some other explanations in that regard. For instance, the company's business may be deteriorating. Moreover, Ecomate Holdings Berhad has been paying dividends for three years, which is a considerable amount of time, suggesting that management must have perceived that the shareholders prefer consistent dividends even though earnings have been shrinking. Overall, we have mixed feelings about Ecomate Holdings Berhad. Even though it appears to be retaining most of its profits, given the low ROE, investors may not be benefitting from all that reinvestment after all. The low earnings growth suggests our theory correct. Wrapping up, we would proceed with caution with this company and one way of doing that would be to look at the risk profile of the business. To know the 3 risks we have identified for Ecomate Holdings Berhad visit our risks dashboard for free. 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
08-03-2025
- Business
- Yahoo
We Think Ideal Capital Berhad's (KLSE:IDEAL) Solid Earnings Are Understated
Ideal Capital Berhad's (KLSE:IDEAL) solid earnings announcement recently didn't do much to the stock price. We did some analysis to find out why and believe that investors might be missing some encouraging factors contained in the earnings. View our latest analysis for Ideal Capital Berhad For anyone who wants to understand Ideal Capital Berhad's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by RM44m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And, after all, that's exactly what the accounting terminology implies. If Ideal Capital Berhad doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Ideal Capital Berhad. Unusual items (expenses) detracted from Ideal Capital Berhad's earnings over the last year, but we might see an improvement next year. Because of this, we think Ideal Capital Berhad's earnings potential is at least as good as it seems, and maybe even better! And the EPS is up 45% annually, 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. When we did our research, we found 3 warning signs for Ideal Capital Berhad (2 are a bit unpleasant!) that we believe deserve your full attention. Today we've zoomed in on a single data point to better understand the nature of Ideal Capital 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. 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) 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
