Latest news with #RM546m
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
19-04-2025
- Business
- Yahoo
Is The Market Rewarding Teladan Group Berhad (KLSE:TELADAN) With A Negative Sentiment As A Result Of Its Mixed Fundamentals?
Teladan Group Berhad (KLSE:TELADAN) has had a rough three months with its share price down 3.6%. It seems that the market might have completely ignored the positive aspects of the company's fundamentals and decided to weigh-in more on the negative aspects. Fundamentals usually dictate market outcomes so it makes sense to study the company's financials. In this article, we decided to focus on Teladan Group Berhad's ROE. Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. 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 Teladan Group Berhad is: 5.2% = RM29m ÷ RM546m (Based on the trailing twelve months to December 2024). The 'return' refers to a company's earnings over the last year. That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.05 in profit. View our latest analysis for Teladan Group Berhad 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. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. It is hard to argue that Teladan Group Berhad's ROE is much good in and of itself. An industry comparison shows that the company's ROE is not much different from the industry average of 5.1% either. Given the low ROE Teladan Group Berhad's five year net income decline of 8.3% is not surprising. However, when we compared Teladan Group Berhad's growth with the industry we found that while the company's earnings have been shrinking, the industry has seen an earnings growth of 16% in the same period. This is quite worrisome. Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. If you're wondering about Teladan Group Berhad's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. When we piece together Teladan Group Berhad's low three-year median payout ratio of 17% (where it is retaining 83% of its profits), calculated for the last three-year period, we are puzzled by the lack of growth. The low payout should mean that the company is retaining most of its earnings and consequently, should see some growth. So there might be other factors at play here which could potentially be hampering growth. For instance, the business has faced some headwinds. Additionally, Teladan Group Berhad has paid dividends over a period of four years, which means that the company's management is rather focused on keeping up its dividend payments, regardless of the shrinking earnings. On the whole, we feel that the performance shown by Teladan Group Berhad can be open to many interpretations. While the company does have a high rate of reinvestment, the low ROE means that all that reinvestment is not reaping any benefit to its investors, and moreover, its having a negative impact on the earnings growth. 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 2 risks we have identified for Teladan Group 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
