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The Star
08-05-2025
- Business
- The Star
Trading ideas: Pavilion REIT, Capital A, Pharmaniaga, Marine & General, SCRB, SD Guthrie, I-Bhd
KUALA LUMPUR: Here is a recap of the announcements that made headlines in Corporate Malaysia. Pavilion REIT has secured unitholders' approval to acquire Banyan Tree and Pavilion Hotel KL for RM480m, reducing Pavilion Mall's portfolio weight to 58.5% Capital A received 99.99% shareholder approval for its PN17 regularisation plan, marking a key step to address financial distress. Pharmaniaga 's 1QFY12/25 net profit increased 15.3% YoY to RM29.6m, thanks to higher sales and cost optimisation efforts, which resulted in a 2.5% reduction in operating expenses. Marine & General is forming a joint venture with WHS Global Engineering to expand into oil and gas engineering. Supreme Consolidated Resources plans to acquire 14,690 sq metres of land in Kuching for RM5.6m to build a new warehousing and cold storage facility. SD Guthrie Bhd, formerly known as Sime Darby Plantation Bhd , delivered a strong first-quarter (1QFY25) result on the back of improved contribution from the upstream segment. I-Bhd executive chairman Tan Sri Lim Kim Hong in delivering the group's report for the first-quarter of 2025 (1QFY25), said the company's strong start reflects its evolution into a more balanced, asset-driven business.
Yahoo
15-04-2025
- Business
- Yahoo
There Are Reasons To Feel Uneasy About ACO Group Berhad's (KLSE:ACO) Returns On Capital
There are a few key trends to look for if we want to identify the next multi-bagger. 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. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. In light of that, when we looked at ACO Group Berhad (KLSE:ACO) and its ROCE trend, we weren't exactly thrilled. Our free stock report includes 2 warning signs investors should be aware of before investing in ACO Group Berhad. Read for free now. 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 ACO Group Berhad is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.053 = RM5.6m ÷ (RM163m - RM58m) (Based on the trailing twelve months to November 2024). Thus, ACO Group Berhad has an ROCE of 5.3%. In absolute terms, that's a low return and it also under-performs the Trade Distributors industry average of 11%. See our latest analysis for ACO 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 want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of ACO Group Berhad. On the surface, the trend of ROCE at ACO Group Berhad doesn't inspire confidence. Over the last five years, returns on capital have decreased to 5.3% from 22% five years ago. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run. On a related note, ACO Group Berhad has decreased its current liabilities to 35% of total assets. So we could link some of this to the decrease in ROCE. What's more, this can reduce some aspects of risk to the business because now the company's suppliers or short-term creditors are funding less of its operations. 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, despite lower returns in the short term, we're encouraged to see that ACO Group Berhad is reinvesting for growth and has higher sales as a result. These growth trends haven't led to growth returns though, since the stock has fallen 23% over the last five years. So we think it'd be worthwhile to look further into this stock given the trends look encouraging. ACO Group Berhad does have some risks, we noticed 2 warning signs (and 1 which shouldn't be ignored) we think you should know about. While ACO Group 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
25-03-2025
- Business
- Yahoo
We're Hopeful That Grand Central Enterprises Bhd (KLSE:GCE) Will Use Its Cash Wisely
There's no doubt that money can be made by owning shares of unprofitable businesses. For example, although software-as-a-service business lost money for years while it grew recurring revenue, if you held shares since 2005, you'd have done very well indeed. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed. So should Grand Central Enterprises Bhd (KLSE:GCE) shareholders be worried about its cash burn? For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). First, we'll determine its cash runway by comparing its cash burn with its cash reserves. The end of cancer? These 15 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. A company's cash runway is calculated by dividing its cash hoard by its cash burn. As at December 2024, Grand Central Enterprises Bhd had cash of RM42m and no debt. In the last year, its cash burn was RM5.6m. Therefore, from December 2024 it had 7.5 years of cash runway. Even though this is but one measure of the company's cash burn, the thought of such a long cash runway warms our bellies in a comforting way. You can see how its cash balance has changed over time in the image below. See our latest analysis for Grand Central Enterprises Bhd Grand Central Enterprises Bhd reduced its cash burn by 7.4% during the last year, which points to some degree of discipline. Revenue also improved during the period, increasing by 10%. On balance, we'd say the company is improving over time. In reality, this article only makes a short study of the company's growth data. This graph of historic earnings and revenue shows how Grand Central Enterprises Bhd is building its business over time. While Grand Central Enterprises Bhd seems to be in a decent position, we reckon it is still worth thinking about how easily it could raise more cash, if that proved desirable. Generally speaking, a listed business can raise new cash through issuing shares or taking on debt. Many companies end up issuing new shares to fund future growth. By looking at a company's cash burn relative to its market capitalisation, we gain insight on how much shareholders would be diluted if the company needed to raise enough cash to cover another year's cash burn. Since it has a market capitalisation of RM94m, Grand Central Enterprises Bhd's RM5.6m in cash burn equates to about 5.9% of its market value. Given that is a rather small percentage, it would probably be really easy for the company to fund another year's growth by issuing some new shares to investors, or even by taking out a loan. As you can probably tell by now, we're not too worried about Grand Central Enterprises Bhd's cash burn. For example, we think its cash runway suggests that the company is on a good path. Its weak point is its cash burn reduction, but even that wasn't too bad! After taking into account the various metrics mentioned in this report, we're pretty comfortable with how the company is spending its cash, as it seems on track to meet its needs over the medium term. Taking a deeper dive, we've spotted 3 warning signs for Grand Central Enterprises Bhd you should be aware of, and 2 of them don't sit too well with us. Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies with significant insider holdings, and this list of stocks growth stocks (according to analyst forecasts) 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
