Latest news with #RM8.78
New Straits Times
5 days ago
- Business
- New Straits Times
Net selling of foreign funds extend to second week
KUALA LUMPUR: Foreign investors extended their selling streak on Bursa Malaysia for the second consecutive week, with net outflows reaching RM1.02 billion. This was nearly 2.6 times higher than the RM392.3 million recorded the previous week, according to MIDF Research. In its fund flow report for the week ended May 30, MIDF Research said foreign investors were net sellers throughout all trading days, with daily outflows ranging from RM61.4 million to RM456.7 million. The highest outflow occurred on Friday at RM456.7 million, followed by Thursday's RM234.6 million. "The three sectors that recorded the highest net foreign inflows were property (RM47.9 million), construction (RM33.3 million) and energy (RM5.2 million). "The top three sectors that recorded the highest net foreign outflows were financial services (-RM565.8 million), consumer products & services (-RM172.2 million) and healthcare (-RM129.9 million)," it said. MIDF Research said local institutions maintained their buying momentum for the second week, with net inflows totaling RM876.5 million, raising their year-to-date net purchases to RM8.78 billion. Local retailers also sustained their net buying trend for a second week, posting inflows of RM142.6 million. The firm noted that the average daily trading volume recorded a broad-based increase over the week. "Local institutions and local retailers saw an increase of 0.03 per cent and 1.0 per cent respectively, while foreign investors saw a rise of 45.6 per cent," it said.
Yahoo
17-04-2025
- Business
- Yahoo
An Intrinsic Calculation For SD Guthrie Berhad (KLSE:SDG) Suggests It's 48% Undervalued
Using the 2 Stage Free Cash Flow to Equity, SD Guthrie Berhad fair value estimate is RM8.78 SD Guthrie Berhad is estimated to be 48% undervalued based on current share price of RM4.60 The RM5.09 analyst price target for SDG is 42% less than our estimate of fair value How far off is SD Guthrie Berhad (KLSE:SDG) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by estimating the company's future cash flows and discounting them to their present value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Don't get put off by the jargon, the math behind it is actually quite straightforward. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. Our free stock report includes 2 warning signs investors should be aware of before investing in SD Guthrie Berhad. Read for free now. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (MYR, Millions) RM1.70b RM2.00b RM2.45b RM2.79b RM3.09b RM3.36b RM3.61b RM3.83b RM4.03b RM4.23b Growth Rate Estimate Source Analyst x3 Analyst x3 Analyst x2 Est @ 14.07% Est @ 10.93% Est @ 8.73% Est @ 7.19% Est @ 6.11% Est @ 5.36% Est @ 4.83% Present Value (MYR, Millions) Discounted @ 8.3% RM1.6k RM1.7k RM1.9k RM2.0k RM2.1k RM2.1k RM2.1k RM2.0k RM2.0k RM1.9k ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM19b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (3.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.3%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM4.2b× (1 + 3.6%) ÷ (8.3%– 3.6%) = RM92b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM92b÷ ( 1 + 8.3%)10= RM41b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is RM61b. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of RM4.6, the company appears quite undervalued at a 48% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at SD Guthrie Berhad as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.3%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for SD Guthrie Berhad Strength Debt is not viewed as a risk. Weakness Earnings growth over the past year underperformed the Food industry. Dividend is low compared to the top 25% of dividend payers in the Food market. Opportunity Trading below our estimate of fair value by more than 20%. Threat Dividends are not covered by cash flow. Annual earnings are forecast to decline for the next 3 years. Whilst important, the DCF calculation is only one of many factors that you need to assess for a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Why is the intrinsic value higher than the current share price? For SD Guthrie Berhad, we've put together three relevant aspects you should further research: Risks: You should be aware of the 2 warning signs for SD Guthrie Berhad (1 is significant!) we've uncovered before considering an investment in the company. Future Earnings: How does SDG's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the KLSE every day. If you want to find the calculation for other stocks just search here. 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.
