Latest news with #SAMEngineering&Equipment(M)Berhad
Yahoo
2 days ago
- Business
- Yahoo
Is SAM Engineering & Equipment (M) Berhad (KLSE:SAM) Expensive For A Reason? A Look At Its Intrinsic Value
Using the 2 Stage Free Cash Flow to Equity, SAM Engineering & Equipment (M) Berhad fair value estimate is RM2.92 SAM Engineering & Equipment (M) Berhad is estimated to be 34% overvalued based on current share price of RM3.92 Our fair value estimate is 28% lower than SAM Engineering & Equipment (M) Berhad's analyst price target of RM4.04 Today we will run through one way of estimating the intrinsic value of SAM Engineering & Equipment (M) Berhad (KLSE:SAM) by taking the expected future cash flows and discounting them to their present value. This will be done using the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. 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. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. 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, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (MYR, Millions) RM143.2m RM8.75m RM41.9m RM87.6m RM112.2m RM135.5m RM156.7m RM175.6m RM192.3m RM207.2m Growth Rate Estimate Source Analyst x2 Analyst x2 Analyst x2 Analyst x2 Est @ 28.11% Est @ 20.77% Est @ 15.63% Est @ 12.03% Est @ 9.51% Est @ 7.75% Present Value (MYR, Millions) Discounted @ 10% RM130 RM7.2 RM31.4 RM59.7 RM69.5 RM76.2 RM80.1 RM81.5 RM81.1 RM79.4 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM696m After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 3.6%. We discount the terminal cash flows to today's value at a cost of equity of 10%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM207m× (1 + 3.6%) ÷ (10%– 3.6%) = RM3.3b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM3.3b÷ ( 1 + 10%)10= RM1.3b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is RM2.0b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of RM3.9, the company appears potentially overvalued at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. 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 SAM Engineering & Equipment (M) 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 10%, which is based on a levered beta of 1.084. 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. View our latest analysis for SAM Engineering & Equipment (M) Berhad Strength Debt is not viewed as a risk. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Machinery market. Expensive based on P/E ratio and estimated fair value. Opportunity Annual earnings are forecast to grow faster than the Malaysian market. Threat Revenue is forecast to grow slower than 20% per year. Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. 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 lower than the current share price? For SAM Engineering & Equipment (M) Berhad, we've compiled three relevant aspects you should explore: Financial Health: Does SAM have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk. Future Earnings: How does SAM'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 Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every Malaysian stock every day, so if you want to find the intrinsic value of any other stock 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.
Yahoo
27-05-2025
- Business
- Yahoo
SAM Engineering & Equipment (M) Berhad Full Year 2025 Earnings: EPS: RM0.14 (vs RM0.20 in FY 2024)
Revenue: RM1.48b (down 1.1% from FY 2024). Net income: RM91.9m (down 15% from FY 2024). Profit margin: 6.2% (down from 7.3% in FY 2024). EPS: RM0.14 (down from RM0.20 in FY 2024). AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. All figures shown in the chart above are for the trailing 12 month (TTM) period Looking ahead, revenue is forecast to grow 11% p.a. on average during the next 3 years, compared to a 14% growth forecast for the Machinery industry in Malaysia. Performance of the Malaysian Machinery industry. The company's shares are down 2.8% from a week ago. While earnings are important, another area to consider is the balance sheet. We've done some analysis and you can see our take on SAM Engineering & Equipment (M) Berhad's balance sheet. 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-04-2025
- Business
- Yahoo
Be Wary Of SAM Engineering & Equipment (M) Berhad (KLSE:SAM) And Its Returns On Capital
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. In light of that, when we looked at SAM Engineering & Equipment (M) Berhad (KLSE:SAM) and its ROCE trend, we weren't exactly thrilled. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for SAM Engineering & Equipment (M) Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.092 = RM141m ÷ (RM1.9b - RM396m) (Based on the trailing twelve months to December 2024). Therefore, SAM Engineering & Equipment (M) Berhad has an ROCE of 9.2%. On its own, that's a low figure but it's around the 8.2% average generated by the Machinery industry. View our latest analysis for SAM Engineering & Equipment (M) Berhad Above you can see how the current ROCE for SAM Engineering & Equipment (M) Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for SAM Engineering & Equipment (M) Berhad . The trend of ROCE doesn't look fantastic because it's fallen from 17% five years ago, while the business's capital employed increased by 143%. Usually this isn't ideal, but given SAM Engineering & Equipment (M) Berhad conducted a capital raising before their most recent earnings announcement, that would've likely contributed, at least partially, to the increased capital employed figure. It's unlikely that all of the funds raised have been put to work yet, so as a consequence SAM Engineering & Equipment (M) Berhad might not have received a full period of earnings contribution from it. Bringing it all together, while we're somewhat encouraged by SAM Engineering & Equipment (M) Berhad's reinvestment in its own business, we're aware that returns are shrinking. Yet to long term shareholders the stock has gifted them an incredible 140% 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. SAM Engineering & Equipment (M) Berhad could be trading at an attractive price in other respects, so you might find our on our platform quite valuable. While SAM Engineering & Equipment (M) 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
21-04-2025
- Business
- Yahoo
Be Wary Of SAM Engineering & Equipment (M) Berhad (KLSE:SAM) And Its Returns On Capital
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? In a perfect world, we'd like to see a company investing more capital into its business and ideally the returns earned from that capital are also increasing. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. In light of that, when we looked at SAM Engineering & Equipment (M) Berhad (KLSE:SAM) and its ROCE trend, we weren't exactly thrilled. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for SAM Engineering & Equipment (M) Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.092 = RM141m ÷ (RM1.9b - RM396m) (Based on the trailing twelve months to December 2024). Therefore, SAM Engineering & Equipment (M) Berhad has an ROCE of 9.2%. On its own, that's a low figure but it's around the 8.2% average generated by the Machinery industry. View our latest analysis for SAM Engineering & Equipment (M) Berhad Above you can see how the current ROCE for SAM Engineering & Equipment (M) Berhad compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free analyst report for SAM Engineering & Equipment (M) Berhad . The trend of ROCE doesn't look fantastic because it's fallen from 17% five years ago, while the business's capital employed increased by 143%. Usually this isn't ideal, but given SAM Engineering & Equipment (M) Berhad conducted a capital raising before their most recent earnings announcement, that would've likely contributed, at least partially, to the increased capital employed figure. It's unlikely that all of the funds raised have been put to work yet, so as a consequence SAM Engineering & Equipment (M) Berhad might not have received a full period of earnings contribution from it. Bringing it all together, while we're somewhat encouraged by SAM Engineering & Equipment (M) Berhad's reinvestment in its own business, we're aware that returns are shrinking. Yet to long term shareholders the stock has gifted them an incredible 140% 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. SAM Engineering & Equipment (M) Berhad could be trading at an attractive price in other respects, so you might find our on our platform quite valuable. While SAM Engineering & Equipment (M) 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
31-03-2025
- Business
- Yahoo
SAM Engineering & Equipment (M) Berhad's (KLSE:SAM) largest shareholders are private companies with 55% ownership, institutions own 27%
SAM Engineering & Equipment (M) Berhad's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public 55% of the company is held by a single shareholder (Accuron Technologies Limited) Institutions own 27% of SAM Engineering & Equipment (M) Berhad AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. If you want to know who really controls SAM Engineering & Equipment (M) Berhad (KLSE:SAM), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company. Institutions, on the other hand, account for 27% of the company's stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. In the chart below, we zoom in on the different ownership groups of SAM Engineering & Equipment (M) Berhad. Check out our latest analysis for SAM Engineering & Equipment (M) Berhad Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing. SAM Engineering & Equipment (M) Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of SAM Engineering & Equipment (M) Berhad, (below). Of course, keep in mind that there are other factors to consider, too. We note that hedge funds don't have a meaningful investment in SAM Engineering & Equipment (M) Berhad. Looking at our data, we can see that the largest shareholder is Accuron Technologies Limited with 55% of shares outstanding. This implies that they have majority interest control of the future of the company. Employees Provident Fund of Malaysia is the second largest shareholder owning 6.4% of common stock, and Public Mutual Bhd. holds about 5.3% of the company stock. While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily. The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves. Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances. Our most recent data indicates that insiders own less than 1% of SAM Engineering & Equipment (M) Berhad. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about RM3.5m worth of stock. This compares to a market capitalization of RM2.5b. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying. The general public-- including retail investors -- own 17% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run. Our data indicates that Private Companies hold 55%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company. It's always worth thinking about the different groups who own shares in a company. But to understand SAM Engineering & Equipment (M) Berhad better, we need to consider many other factors. I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph. If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future. NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures. 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.
