Latest news with #RM46m
Yahoo
30-05-2025
- Business
- Yahoo
Dutch Lady Milk Industries Berhad's (KLSE:DLADY) Profits Appear To Have Quality Issues
Dutch Lady Milk Industries Berhad's (KLSE:DLADY) healthy profit numbers didn't contain any surprises for investors. We think this is due to investors looking beyond the statutory profits and being concerned with what they see. 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. 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'. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. 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. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". Over the twelve months to March 2025, Dutch Lady Milk Industries Berhad recorded an accrual ratio of 0.29. 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. Even though it reported a profit of RM95.0m, a look at free cash flow indicates it actually burnt through RM46m in the last year. Coming off the back of negative free cash flow last year, we imagine some shareholders might wonder if its cash burn of RM46m, this year, indicates high risk. 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. Dutch Lady Milk Industries Berhad's accrual ratio for the last twelve months signifies cash conversion is less than ideal, which is a negative when it comes to our view of its earnings. Because of this, we think that it may be that Dutch Lady Milk Industries Berhad's statutory profits are better than its underlying earnings power. And we are pleased to note that EPS is at least heading in the right direction in the alst twelve months. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. You'd be interested to know, that we found 1 warning sign for Dutch Lady Milk Industries Berhad and you'll want to know about this. This note has only looked at a single factor that sheds light on the nature of Dutch Lady Milk Industries Berhad's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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) 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
07-05-2025
- Business
- Yahoo
We Think Ocean Vantage Holdings Berhad's (KLSE:OVH) Solid Earnings Are Understated
Ocean Vantage Holdings Berhad's (KLSE:OVH) healthy profit numbers didn't contain any surprises for investors. We think this is due to investors looking beyond the statutory profits and being concerned with what they see. We've discovered 4 warning signs about Ocean Vantage Holdings Berhad. View them for free. KLSE:OVH Earnings and Revenue History May 7th 2025 Examining Cashflow Against Ocean Vantage Holdings Berhad's Earnings 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. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. 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 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. Ocean Vantage Holdings Berhad has an accrual ratio of -1.15 for the year to December 2024. That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow. Indeed, in the last twelve months it reported free cash flow of RM46m, well over the RM6.36m it reported in profit. Ocean Vantage Holdings Berhad's free cash flow improved over the last year, which is generally good to see. However, that's not all there is to consider. The accrual ratio is reflecting the impact of unusual items on statutory profit, at least in part. Check out our latest analysis for Ocean Vantage Holdings Berhad Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Ocean Vantage Holdings Berhad. How Do Unusual Items Influence Profit? While the accrual ratio might bode well, we also note that Ocean Vantage Holdings Berhad's profit was boosted by unusual items worth RM13m in the last twelve months. 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 analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. Ocean Vantage Holdings 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.
Yahoo
23-04-2025
- Business
- Yahoo
Returns On Capital Are Showing Encouraging Signs At Envictus International Holdings (SGX:BQD)
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. 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. So on that note, Envictus International Holdings (SGX:BQD) looks quite promising in regards to its trends of return on capital. We've discovered 2 warning signs about Envictus International Holdings. 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. To calculate this metric for Envictus International Holdings, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.13 = RM46m ÷ (RM546m - RM185m) (Based on the trailing twelve months to September 2024). So, Envictus International Holdings has an ROCE of 13%. On its own, that's a standard return, however it's much better than the 8.4% generated by the Consumer Retailing industry. View our latest analysis for Envictus International Holdings 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're interested in investigating Envictus International Holdings' past further, check out this free graph covering Envictus International Holdings' past earnings, revenue and cash flow. Like most people, we're pleased that Envictus International Holdings is now generating some pretax earnings. While the business is profitable now, it used to be incurring losses on invested capital five years ago. At first glance, it seems the business is getting more proficient at generating returns, because over the same period, the amount of capital employed has reduced by 24%. The reduction could indicate that the company is selling some assets, and considering returns are up, they appear to be selling the right ones. For the record though, there was a noticeable increase in the company's current liabilities over the period, so we would attribute some of the ROCE growth to that. Effectively this means that suppliers or short-term creditors are now funding 34% of the business, which is more than it was five years ago. It's worth keeping an eye on this because as the percentage of current liabilities to total assets increases, some aspects of risk also increase. In summary, it's great to see that Envictus International Holdings has been able to turn things around and earn higher returns on lower amounts of capital. And a remarkable 182% total return over the last five years tells us that investors are expecting more good things to come in the future. Therefore, we think it would be worth your time to check if these trends are going to continue. If you'd like to know about the risks facing Envictus International Holdings, we've discovered 2 warning signs that you should be aware of. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive 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.
Yahoo
12-04-2025
- Business
- Yahoo
Returns At MyTech Group Berhad (KLSE:MYTECH) Are On The Way Up
What are the early trends we should look for to identify a stock that could multiply in value over the long term? 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. 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 MyTech Group Berhad (KLSE:MYTECH) and its trend of ROCE, we really liked what we saw. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. 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 MyTech Group Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.067 = RM3.0m ÷ (RM46m - RM1.4m) (Based on the trailing twelve months to December 2024). Therefore, MyTech Group Berhad has an ROCE of 6.7%. On its own, that's a low figure but it's around the 8.2% average generated by the Machinery industry. Check out our latest analysis for MyTech Group 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 MyTech Group Berhad has performed in the past in other metrics, you can view this free graph of MyTech Group Berhad's past earnings, revenue and cash flow . MyTech Group Berhad is showing promise given that its ROCE is trending up and to the right. 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 358% over the last five years. So it's likely that the business is now reaping the full benefits of its past investments, since the capital employed hasn't changed considerably. On that front, things are looking good so it's worth exploring what management has said about growth plans going forward. As discussed above, MyTech Group Berhad appears to be getting more proficient at generating returns since capital employed has remained flat but earnings (before interest and tax) are up. And with the stock having performed exceptionally well over the last five years, these patterns are being accounted for by investors. With that being said, we still think the promising fundamentals mean the company deserves some further due diligence. On a final note, we found 4 warning signs for MyTech Group Berhad (2 are concerning) you should be aware of. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive 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
Yahoo
01-04-2025
- Business
- Yahoo
HeiTech Padu Berhad (KLSE:HTPADU) May Have Issues Allocating Its Capital
If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. 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. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. So while HeiTech Padu Berhad (KLSE:HTPADU) has a high ROCE right now, lets see what we can decipher from how returns are changing. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. 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. To calculate this metric for HeiTech Padu Berhad, this is the formula: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.21 = RM46m ÷ (RM554m - RM336m) (Based on the trailing twelve months to December 2024). So, HeiTech Padu Berhad has an ROCE of 21%. In absolute terms that's a great return and it's even better than the IT industry average of 13%. View our latest analysis for HeiTech Padu Berhad Historical performance is a great place to start when researching a stock so above you can see the gauge for HeiTech Padu Berhad's ROCE against it's prior returns. If you're interested in investigating HeiTech Padu Berhad's past further, check out this free graph covering HeiTech Padu Berhad's past earnings, revenue and cash flow. We weren't thrilled with the trend because HeiTech Padu Berhad's ROCE has reduced by 53% over the last five years, while the business employed 76% more capital. However, some of the increase in capital employed could be attributed to the recent capital raising that's been completed prior to their latest reporting period, so keep that in mind when looking at the ROCE decrease. HeiTech Padu 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 side note, HeiTech Padu Berhad's current liabilities are still rather high at 61% of total assets. This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower. While returns have fallen for HeiTech Padu Berhad in recent times, we're encouraged to see that sales are growing and that the business is reinvesting in its operations. And long term investors must be optimistic going forward because the stock has returned a huge 228% to shareholders in the last five years. So should these growth trends continue, we'd be optimistic on the stock going forward. If you'd like to know more about HeiTech Padu Berhad, we've spotted 3 warning signs, and 2 of them are a bit concerning. If you want to search for more stocks that have been earning high returns, check out this free list of stocks with solid balance sheets that are also earning 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
