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Yahoo
26-05-2025
- Business
- Yahoo
A Look At The Intrinsic Value Of Solarvest Holdings Berhad (KLSE:SLVEST)
Solarvest Holdings Berhad's estimated fair value is RM2.05 based on 2 Stage Free Cash Flow to Equity Current share price of RM1.73 suggests Solarvest Holdings Berhad is potentially trading close to its fair value Analyst price target for SLVEST is RM2.31, which is 13% above our fair value estimate Does the May share price for Solarvest Holdings Berhad (KLSE:SLVEST) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. 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'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. Generally we assume that a dollar today is more valuable than a dollar in the future, 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) RM22.4m RM148.3m RM83.9m RM104.8m RM120.9m RM135.2m RM147.9m RM159.2m RM169.5m RM179.0m Growth Rate Estimate Source Analyst x2 Analyst x1 Analyst x2 Analyst x1 Est @ 15.36% Est @ 11.85% Est @ 9.38% Est @ 7.66% Est @ 6.45% Est @ 5.61% Present Value (MYR, Millions) Discounted @ 11% RM20.2 RM120 RM61.1 RM68.7 RM71.4 RM71.8 RM70.7 RM68.5 RM65.6 RM62.4 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM681m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. 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 11%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM179m× (1 + 3.6%) ÷ (11%– 3.6%) = RM2.5b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM2.5b÷ ( 1 + 11%)10= RM865m 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 RM1.5b. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of RM1.7, the company appears about fair value at a 15% 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. 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. 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 Solarvest Holdings 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 11%, which is based on a levered beta of 1.261. 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 Solarvest Holdings Berhad Strength Earnings growth over the past year exceeded the industry. Debt is well covered by earnings. Weakness No major weaknesses identified for SLVEST. Opportunity Annual earnings are forecast to grow faster than the Malaysian market. Current share price is below our estimate of fair value. Threat Debt is not well covered by operating cash flow. Revenue is forecast to grow slower than 20% per year. Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. DCF models are not the be-all and end-all of investment valuation. 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. For Solarvest Holdings Berhad, there are three fundamental aspects you should assess: Risks: Take risks, for example - Solarvest Holdings Berhad has 2 warning signs we think you should be aware of. Future Earnings: How does SLVEST'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
25-05-2025
- Business
- Yahoo
Should You Be Impressed By Creative Global Technology Holdings Limited's (NASDAQ:CGTL) ROE?
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). By way of learning-by-doing, we'll look at ROE to gain a better understanding of Creative Global Technology Holdings Limited (NASDAQ:CGTL). Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Simply put, it is used to assess the profitability of a company in relation to its equity capital. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Creative Global Technology Holdings is: 32% = US$4.3m ÷ US$13m (Based on the trailing twelve months to September 2024). The 'return' is the profit over the last twelve months. That means that for every $1 worth of shareholders' equity, the company generated $0.32 in profit. See our latest analysis for Creative Global Technology Holdings Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As is clear from the image below, Creative Global Technology Holdings has a better ROE than the average (11%) in the Electronic industry. That's clearly a positive. Bear in mind, a high ROE doesn't always mean superior financial performance. A higher proportion of debt in a company's capital structure may also result in a high ROE, where the high debt levels could be a huge risk . To know the 4 risks we have identified for Creative Global Technology Holdings visit our risks dashboard for free. Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the use of debt will improve the returns, but will not change the equity. That will make the ROE look better than if no debt was used. Shareholders will be pleased to learn that Creative Global Technology Holdings has not one iota of net debt! Its high ROE indicates the business is high quality, but the fact that this was achieved without leverage is veritably impressive. After all, with cash on the balance sheet, a company has a lot more optionality in good times and bad. Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE. Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking this free this detailed graph of past earnings, revenue and cash flow. If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt. 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
19-05-2025
- Business
- Yahoo
With a 59% stake, Hextar Technologies Solutions Berhad (KLSE:HEXTECH) insiders have a lot riding on the company
Hextar Technologies Solutions Berhad's significant insider ownership suggests inherent interests in company's expansion Chong-Yi Ong owns 55% of the company Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock We've discovered 1 warning sign about Hextar Technologies Solutions Berhad. View them for free. To get a sense of who is truly in control of Hextar Technologies Solutions Berhad (KLSE:HEXTECH), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 59% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company. So, insiders of Hextar Technologies Solutions Berhad have a lot at stake and every decision they make on the company's future is important to them from a financial point of view. Let's take a closer look to see what the different types of shareholders can tell us about Hextar Technologies Solutions Berhad. Check out our latest analysis for Hextar Technologies Solutions 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. Since institutions own only a small portion of Hextar Technologies Solutions Berhad, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too. We note that hedge funds don't have a meaningful investment in Hextar Technologies Solutions Berhad. Chong-Yi Ong is currently the company's largest shareholder with 55% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Agilevest Sdn. Bhd. is the second largest shareholder owning 4.9% of common stock, and Exsim Hospitality Holdings Sdn Bhd holds about 4.3% 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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held. While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO. 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 the majority of Hextar Technologies Solutions Berhad. This means they can collectively make decisions for the company. Given it has a market cap of RM2.2b, that means they have RM1.3b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently. The general public, who are usually individual investors, hold a 16% stake in Hextar Technologies Solutions Berhad. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders. It seems that Private Companies own 20%, of the Hextar Technologies Solutions Berhad stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research. While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Hextar Technologies Solutions Berhad . If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data. 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. Sign in to access your portfolio
Yahoo
11-05-2025
- Business
- Yahoo
Kindly MD First Quarter 2025 Earnings: US$0.17 loss per share (vs US$0.061 loss in 1Q 2024)
Revenue: US$579.7k (down 30% from 1Q 2024). Net loss: US$1.04m (loss widened by 268% from 1Q 2024). US$0.17 loss per share (further deteriorated from US$0.061 loss in 1Q 2024). Our free stock report includes 5 warning signs investors should be aware of before investing in Kindly MD. Read for free now. All figures shown in the chart above are for the trailing 12 month (TTM) period Kindly MD shares are up 80% from a week ago. You should learn about the 5 warning signs we've spotted with Kindly MD (including 3 which are potentially serious). 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
