Is Tex Cycle Technology (M) Berhad (KLSE:TEXCYCL) Using Too Much Debt?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.'  So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company.  As with many other companies Tex Cycle Technology (M) Berhad (KLSE:TEXCYCL) makes use of debt.  But the real question is whether this debt is making the company risky.  When Is Debt A Problem?  Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy.  If things get really bad, the lenders can take control of the business.  However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet.  Of course, debt can be an important tool in businesses, particularly capital heavy businesses.  The first step when considering a company's debt levels is to consider its cash and debt together.   Check out our latest analysis for Tex Cycle Technology (M) Berhad  What Is Tex Cycle Technology (M) Berhad's Debt?  The image below, which you can click on for greater detail, shows that at December 2022 Tex Cycle Technology (M) Berhad had debt of RM28.0m, up from RM6.10m in one year.    However, because it has a cash reserve of RM22.5m, its net debt is less, at about RM5.52m.  KLSE:TEXCYCL Debt to Equity History March 17th 2023 How Strong Is Tex Cycle Technology (M) Berhad's Balance Sheet?  According to the last reported balance sheet, Tex Cycle Technology (M) Berhad had liabilities of RM7.61m due within 12 months, and liabilities of RM28.6m due beyond 12 months.   Offsetting this, it had RM22.5m in cash and RM17.5m in receivables that were due within 12 months.   So it actually has RM3.82m more liquid assets than total liabilities.    This surplus suggests that Tex Cycle Technology (M) Berhad has a conservative balance sheet, and could probably eliminate its debt without much difficulty.     In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover).  Thus we consider debt relative to earnings both with and without depreciation and amortization expenses.   Tex Cycle Technology (M) Berhad's net debt is only 0.49 times its EBITDA.  And its EBIT easily covers its interest expense, being 26.2 times the size.  So you could argue it is no more threatened by its debt than an elephant is by a mouse.        On the other hand, Tex Cycle Technology (M) Berhad's EBIT dived 11%, over the last year.  If that rate of decline in earnings continues, the company could find itself in a tight spot.      When analysing debt levels, the balance sheet is the obvious place to start.  But you can't view debt in total isolation; since Tex Cycle Technology (M) Berhad will need earnings to service that debt.  So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.  Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash.   So we clearly need to look at whether that EBIT is leading to corresponding free cash flow.    During the last three years, Tex Cycle Technology (M) Berhad burned a lot of cash.  While investors are no doubt expecting a reversal of that situation in due course, it clearly does mean its use of debt is more risky.    Our View Based on what we've seen Tex Cycle Technology (M) Berhad is not finding it easy, given its conversion of EBIT to free cash flow, but the other factors we considered give us cause to be optimistic.   In particular, we are dazzled with its interest cover.       When we consider all the factors mentioned above, we do feel a bit cautious about Tex Cycle Technology (M) Berhad's use of debt.  While debt does have its upside in higher potential returns, we think shareholders should definitely consider how debt levels might make the stock more risky.    There's no doubt that we learn most about debt from the balance sheet.  However, not all investment risk resides within the balance sheet - far from it.   For example, we've discovered 3 warning signs for Tex Cycle Technology (M) Berhad (2 make us uncomfortable!) that you should be aware of before investing here.     When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now. Valuation is complex, but we're helping make it simple.Find out whether Tex Cycle Technology (M) Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Mixed Fundamentals Could Impact Tex Cycle Technology (M) Berhad's Share Price Momentum

Tex Cycle Technology (M) Berhad (KLSE:TEXCYCL) has had a great run on the share market with its stock up by a significant 100% over the last month.   However, we decided to pay attention to the company's fundamentals which don't appear to give a clear sign about the company's financial health.      In this article, we decided to focus on Tex Cycle Technology (M) Berhad's  ROE.    Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money.  In short, ROE shows the profit each dollar generates with respect to its shareholder investments.  View our latest analysis for Tex Cycle Technology (M) Berhad  How Is ROE Calculated?  The formula for return on equity is:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Tex Cycle Technology (M) Berhad is:6.0% = RM7.3m ÷ RM122m (Based on the trailing twelve months to September 2022). The 'return' is the profit over the last twelve months.  That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.06 in profit.   What Has ROE Got To Do With Earnings Growth?  So far, we've learned that ROE is a measure of a company's profitability.  We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company.  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.  A Side By Side comparison of Tex Cycle Technology (M) Berhad's Earnings Growth And 6.0% ROE  When you first look at it, Tex Cycle Technology (M) Berhad's ROE doesn't look that attractive.   A quick further study shows that the company's ROE doesn't compare favorably to the industry average of 10% either.   Therefore, it might not be wrong to say that the five year net income decline of 24% seen by Tex Cycle Technology (M) Berhad was probably the result of it having a lower ROE.  We believe that there also might be other aspects that are negatively influencing the company's earnings prospects.  For instance, the company has a very high payout ratio, or is faced with competitive pressures.     So, as a next step, we compared Tex Cycle Technology (M) Berhad's performance against the industry and were disappointed to discover that while the company has been shrinking its earnings, the industry has been growing its earnings at a rate of 1.1% in the same period.   KLSE:TEXCYCL Past Earnings Growth January 29th 2023 Earnings growth is a huge factor in stock valuation.  It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline).  By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await.    Is Tex Cycle Technology (M) Berhad fairly valued compared to other companies? These 3 valuation measures might help you decide.    Is Tex Cycle Technology (M) Berhad Efficiently Re-investing Its Profits?   Tex Cycle Technology (M) Berhad's low three-year median payout ratio of 24% (or a retention ratio of 76%) over the last three years should mean that the company is retaining most of its earnings to fuel its growth but the company's earnings have actually shrunk.  This typically shouldn't be the case when a company is retaining most of its earnings.  It looks like there might be some other reasons to explain the lack in that respect. For example, the business could be in decline.     Moreover, Tex Cycle Technology (M) Berhad has been paying dividends for at least ten years or more suggesting that management must have perceived that the shareholders prefer dividends over earnings growth.     Summary    On the whole, we feel that the performance shown by Tex Cycle Technology (M) Berhad can be open to many interpretations.      Even though it appears to be retaining most of its profits, given the low ROE, investors may not be benefitting from all that reinvestment after all. The low earnings growth suggests our theory correct.       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.   You can see the 3 risks we have identified for Tex Cycle Technology (M) Berhad by visiting our risks dashboard for free  on our platform here. Valuation is complex, but we're helping make it simple.Find out whether Tex Cycle Technology (M) Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Tex Cycle Technology (M) Berhad Full Year 2022 Earnings: EPS: RM0.037 (vs RM0.025 in FY 2021)

Tex Cycle Technology (M) Berhad (KLSE:TEXCYCL) Full Year 2022 ResultsKey Financial Results Revenue: RM31.5m (up 9.5% from FY 2021). Net income: RM9.39m (up 51% from FY 2021). Profit margin: 30% (up from 22% in FY 2021). The increase in margin was primarily driven by higher revenue. EPS: RM0.037 (up from RM0.025 in FY 2021).  KLSE:TEXCYCL Earnings and Revenue History February 19th 2023 All figures shown in the chart above are for the trailing 12 month (TTM) period Tex Cycle Technology (M) Berhad shares are up 1.2% from a week ago.   Risk Analysis It's necessary to consider the ever-present spectre of investment risk.   We've identified 3 warning signs  with Tex Cycle Technology (M) Berhad (at least 2 which are a bit unpleasant), and understanding them should be part of your investment process. Valuation is complex, but we're helping make it simple.Find out whether Tex Cycle Technology (M) Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Tex Cycle Technology (M) Berhad's (KLSE:TEXCYCL) Solid Profits Have Weak Fundamentals

Investors were disappointed with Tex Cycle Technology (M) Berhad's (KLSE:TEXCYCL) earnings, despite the strong profit numbers.  Our analysis uncovered some concerning factors that we believe the market might be paying attention to.     See our latest analysis for Tex Cycle Technology (M) Berhad KLSE:TEXCYCL Earnings and Revenue History April 25th 2023  The Impact Of Unusual Items On Profit  To properly understand Tex Cycle Technology (M) Berhad's profit results, we need to consider the RM2.9m gain attributed to unusual items.   While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm.  When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated.  Which is hardly surprising, given the name.   We can see that Tex Cycle Technology (M) Berhad's positive unusual items were quite significant relative to its profit in the year to December 2022.  All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.    Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Tex Cycle Technology (M) Berhad.  Our Take On Tex Cycle Technology (M) Berhad's Profit Performance As we discussed above, we think the significant positive unusual item makes Tex Cycle Technology (M) Berhad's earnings a poor guide to its underlying profitability.      For this reason, we think that Tex Cycle Technology (M) Berhad's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company.    But on the bright side, its earnings per share have grown at an extremely impressive rate over the last three years.     Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors.     If you'd like to know more about Tex Cycle Technology (M) Berhad as a business, it's important to be aware of any risks it's facing.    To help with this, we've discovered 3 warning signs (1 doesn't sit too well with us!) that you ought to be aware of before buying any shares in Tex Cycle Technology (M) Berhad.   This note has only looked at a single factor that sheds light on the nature of Tex Cycle Technology (M) Berhad's profit.   But there is always more to discover if you are capable of focussing your mind on minutiae.  For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying.  So you may wish to see this free  collection of companies boasting high return on equity, or  this list of stocks that insiders are buying. Valuation is complex, but we're helping make it simple.Find out whether Tex Cycle Technology (M) Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


The Returns On Capital At Tex Cycle Technology (M) Berhad (KLSE:TEXCYCL) Don't Inspire Confidence

To find a multi-bagger stock, what are the underlying trends we should look for in a business?  One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing 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.    Although, when we looked at Tex Cycle Technology (M) Berhad (KLSE:TEXCYCL), it didn't seem to tick all of these boxes.     Understanding Return On Capital Employed (ROCE)  For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business.  Analysts use this formula to calculate it for Tex Cycle Technology (M) Berhad:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.057 = RM8.4m ÷ (RM154m - RM6.3m) (Based on the trailing twelve months to September 2022). Therefore, Tex Cycle Technology (M) Berhad has an ROCE of 5.7%. Ultimately, that's a low return and it under-performs the Commercial Services industry average of 10%.    Check out our latest analysis for Tex Cycle Technology (M) Berhad  KLSE:TEXCYCL Return on Capital Employed January 11th 2023 Historical performance is a great place to start when researching a stock so above you can see the gauge for Tex Cycle Technology (M) Berhad's ROCE against it's prior returns.  If you're interested in investigating Tex Cycle Technology (M) Berhad's past further, check out this free graph of past earnings, revenue and cash flow.  How Are Returns Trending?  When we looked at the ROCE trend at Tex Cycle Technology (M) Berhad, we didn't gain much confidence.   Over the last  five years, returns on capital have decreased to 5.7% from 17%  five years ago.    Although, given both revenue and the amount of assets employed in the business have increased, it could suggest the company is investing in growth, and the extra capital has led to a short-term reduction in ROCE.  If these investments prove successful, this can bode very well for long term stock performance.    The Key Takeaway  Even though returns on capital have fallen in the short term, we find it promising that revenue and capital employed have both increased for Tex Cycle Technology (M) Berhad.         However, despite the promising trends, the stock has fallen 17% over the last  five years, so there might be an opportunity here for astute investors.   So we think it'd be worthwhile to look further into this stock given the trends look encouraging.      If you'd like to know more about Tex Cycle Technology (M) Berhad, we've spotted   3 warning signs,  and 2 of them shouldn't be ignored.     While Tex Cycle Technology (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. Valuation is complex, but we're helping make it simple.Find out whether Tex Cycle Technology (M) Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Tien Wah Press Holdings Berhad (KLSE:TIENWAH) Has Affirmed Its Dividend Of MYR0.028

The board of Tien Wah Press Holdings Berhad (KLSE:TIENWAH) has announced that it will pay a dividend of MYR0.028 per share on the 31st of July.      This makes the dividend yield 6.6%, which will augment investor returns quite nicely.    Check out our latest analysis for Tien Wah Press Holdings Berhad  Tien Wah Press Holdings Berhad Might Find It Hard To Continue The Dividend  If the payments aren't sustainable, a high yield for a few years won't matter that much.     Tien Wah Press Holdings Berhad is not generating a profit, but its free cash flows easily cover the dividend, leaving plenty for reinvestment in the business.  In general, cash flows are more important than the more traditional measures of profit so we feel pretty comfortable with the dividend at this level.    Assuming the trend of the last few years continues, EPS will grow by 35.4% over the next 12 months.  While it is good to see income moving in the right direction, it still looks like the company won't achieve profitability.  The positive free cash flows give us some comfort, however, that the dividend could continue to be sustained.     KLSE:TIENWAH Historic Dividend April 21st 2023 Dividend Volatility  While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years.      The annual payment during the last 10 years was MYR0.17 in 2013, and the most recent fiscal year payment was MYR0.056.      The dividend has fallen 67% over that period.    Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.    The Company Could Face Some Challenges Growing The Dividend  Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon.      Tien Wah Press Holdings Berhad has impressed us by growing EPS at 35% per year over the past five years.      While the company hasn't yet recorded a profit, the growth rates are healthy.  If this trajectory continues and the company can turn a profit soon, it could bode well for the dividend going forward.    Our Thoughts On Tien Wah Press Holdings Berhad's Dividend  Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year.       The payments haven't been particularly stable and we don't see huge growth potential, but with the dividend well covered by cash flows it could prove to be reliable over the short term.      We would probably look elsewhere for an income investment.   Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one.  Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company.   Just as an example, we've come across 3 warning signs for Tien Wah Press Holdings Berhad you should be aware of, and 1 of them is significant.    Is Tien Wah Press Holdings Berhad not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.  Valuation is complex, but we're helping make it simple.Find out whether Tien Wah Press Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Tien Wah Press Holdings Berhad (KLSE:TIENWAH) Will Pay A RM0.028 Dividend In Three Days

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Tien Wah Press Holdings Berhad (KLSE:TIENWAH) is about to trade ex-dividend in the next 3 days.  The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend.  It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date.   Thus, you can purchase Tien Wah Press Holdings Berhad's shares before the 7th of July in order to receive the dividend, which the company will pay on the 31st of July.   The company's next dividend payment will be RM0.028 per share, and in the last 12 months, the company paid a total of RM0.056 per share.  Based on the last year's worth of payments, Tien Wah Press Holdings Berhad has a trailing yield of 6.7% on the current stock price of MYR0.835.    If you buy this business for its dividend, you should have an idea of whether Tien Wah Press Holdings Berhad's dividend is reliable and sustainable.  So we need to investigate whether Tien Wah Press Holdings Berhad can afford its dividend, and if the dividend could grow.  View our latest analysis for Tien Wah Press Holdings Berhad  Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut.   Tien Wah Press Holdings Berhad paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run.     Given that the company reported a loss last year, we now need to see if it generated enough free cash flow to fund the dividend.  If Tien Wah Press Holdings Berhad didn't generate enough cash to pay the dividend, then it must have either paid from cash in the bank or by borrowing money, neither of which is sustainable in the long term.     It distributed 43% of its free cash flow as dividends, a comfortable payout level for most companies.      Click here to see how much of its profit Tien Wah Press Holdings Berhad paid out over the last 12 months. KLSE:TIENWAH Historic Dividend July 3rd 2023 Have Earnings And Dividends Been Growing? Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving.   If earnings fall far enough, the company could be forced to cut its dividend.     Tien Wah Press Holdings Berhad was unprofitable last year, but at least the general trend suggests its earnings have been improving over the past five years.  Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.     Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time.     Tien Wah Press Holdings Berhad's dividend payments per share have declined at 11% per year on average over the past 10 years, which is uninspiring.       We update our analysis on Tien Wah Press Holdings Berhad every 24 hours, so you can always get the latest insights on its financial health, here.   Final Takeaway  From a dividend perspective, should investors buy or avoid Tien Wah Press Holdings Berhad?    It's hard to get used to Tien Wah Press Holdings Berhad paying a dividend despite reporting a loss over the past year. At least the dividend was covered by free cash flow, however.      It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're not all that optimistic on its dividend prospects.    In light of that, while Tien Wah Press Holdings Berhad has an appealing dividend, it's worth knowing the risks involved with this stock.     To help with this, we've discovered 3 warning signs for Tien Wah Press Holdings Berhad (1 is potentially serious!) that you ought to be aware of before buying the shares.   If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks. Valuation is complex, but we're helping make it simple.Find out whether Tien Wah Press Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Tien Wah Press Holdings Berhad Third Quarter 2022 Earnings: RM0.013 loss per share (vs RM0.012 profit in 3Q 2021)

Tien Wah Press Holdings Berhad (KLSE:TIENWAH) Third Quarter 2022 ResultsKey Financial Results Revenue: RM58.6m (flat on 3Q 2021). Net loss: RM1.83m (down by 203% from RM1.77m profit in 3Q 2021). RM0.013 loss per share (down from RM0.012 profit in 3Q 2021).  KLSE:TIENWAH Earnings and Revenue History November 27th 2022 All figures shown in the chart above are for the trailing 12 month (TTM) period Tien Wah Press Holdings Berhad's share price is broadly unchanged from a week ago.   Risk Analysis You should learn about the   3 warning signs  we've spotted with Tien Wah Press Holdings Berhad (including 1 which is concerning). Valuation is complex, but we're helping make it simple.Find out whether Tien Wah Press Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


There's Reason For Concern Over Unique Fire Holdings Berhad's (KLSE:UNIQUE) Massive 32% Price Jump

Unique Fire Holdings Berhad (KLSE:UNIQUE) shares have had a really impressive month, gaining 32% after a shaky period beforehand.    Longer-term shareholders would be thankful for the recovery in the share price since it's now virtually flat for the year after the recent bounce.    Following the firm bounce in price, Unique Fire Holdings Berhad's price-to-earnings (or "P/E") ratio of 17.4x might make it look like a sell right now compared to the market in Malaysia, where around half of the companies have P/E ratios below 13x and even P/E's below 7x are quite common.  Although, it's not wise to just take the P/E at face value as there may be an explanation why it's lofty.    Recent times haven't been advantageous for Unique Fire Holdings Berhad as its earnings have been rising slower than most other companies.   It might be that many expect the uninspiring earnings performance to recover significantly, which has kept the P/E from collapsing.  If not, then existing shareholders may be very nervous about the viability of the share price.      View our latest analysis for Unique Fire Holdings Berhad KLSE:UNIQUE Price Based on Past Earnings December 21st 2022 If you'd like to see what analysts are forecasting going forward, you should check out our free report on Unique Fire Holdings Berhad.  How Is Unique Fire Holdings Berhad's Growth Trending?   Unique Fire Holdings Berhad's P/E ratio would be typical for a company that's expected to deliver solid growth, and importantly, perform better than the market.   Retrospectively, the last year delivered a decent 5.9% gain to the company's bottom line.   Ultimately though, it couldn't turn around the poor performance of the prior period, with EPS shrinking 55% in total over the last three years.  Therefore, it's fair to say the earnings growth recently has been undesirable for the company.     Turning to the outlook, the next year should generate growth of 6.6%  as estimated by the one analyst watching the company.  With the market predicted to deliver 8.7% growth , the company is positioned for a weaker earnings result.  With this information, we find it concerning that Unique Fire Holdings Berhad is trading at a P/E higher than the market.  It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen.  Only the boldest would assume these prices are sustainable as this level of earnings growth is likely to weigh heavily on the share price eventually.    The Bottom Line On Unique Fire Holdings Berhad's P/E  The large bounce in Unique Fire Holdings Berhad's shares has lifted the company's P/E to a fairly high level.     It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.  We've established that Unique Fire Holdings Berhad currently trades on a much higher than expected P/E since its forecast growth is lower than the wider market.  Right now we are increasingly uncomfortable with the high P/E as the predicted future earnings aren't likely to support such positive sentiment for long.  Unless these conditions improve markedly, it's very challenging to accept these prices as being reasonable.      It is also worth noting that we have found 1 warning sign for Unique Fire Holdings Berhad that you need to take into consideration.   You might be able to find a better investment than Unique Fire Holdings Berhad. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a P/E below 20x (but have proven they can grow earnings). Valuation is complex, but we're helping make it simple.Find out whether Unique Fire Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Unique Fire Holdings Berhad (KLSE:UNIQUE) Has A ROE Of 10%

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).  We'll use ROE to examine Unique Fire Holdings Berhad (KLSE:UNIQUE), by way of a worked example.   Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money.  In simpler terms, it measures the profitability of a company in relation to shareholder's equity.  View our latest analysis for Unique Fire Holdings Berhad  How To Calculate Return On Equity?  The formula for return on equity is:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Unique Fire Holdings Berhad is:10% = RM5.6m ÷ RM56m (Based on the trailing twelve months to March 2022). The 'return' is the amount earned after tax over the last twelve months.  One way to conceptualize this is that for each MYR1 of shareholders' capital it has, the company made MYR0.10 in profit.   Does Unique Fire Holdings Berhad Have A Good ROE?  One simple way to determine if a company has a good return on equity is to compare it to the average for its industry.  The limitation of this approach is that some companies are quite different from others, even within the same industry classification.   The image below shows that Unique Fire Holdings Berhad has an ROE that is roughly in line with the Commercial Services industry average (10%).  KLSE:UNIQUE Return on Equity December 19th 2022 That isn't amazing, but it is respectable.    Even if the ROE is respectable when compared to the industry, its worth checking if the firm's ROE is being aided by high debt levels.  If a company takes on too much debt, it is at higher risk of defaulting on interest payments.   How Does Debt Impact Return On Equity?  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.  Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.  Combining Unique Fire Holdings Berhad's Debt And Its 10% Return On Equity  While Unique Fire Holdings Berhad does have some debt, with a debt to equity ratio of just 0.25, we wouldn't say debt is excessive.    Its ROE isn't particularly impressive, but the debt levels are quite modest, so the business probably has some real potential.   Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.     Summary    Return on equity is useful for comparing the quality of different businesses.  Companies that can achieve high returns on equity without too much debt are generally of good quality.  All else being equal, a higher ROE is better.  But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings.  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 report on analyst forecasts for the company.  But note: Unique Fire Holdings Berhad may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt. Valuation is complex, but we're helping make it simple.Find out whether Unique Fire Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Caely Holdings Bhd Full Year 2022 Earnings: RM0.03 loss per share (vs RM0.059 loss in FY 2021)

Caely Holdings Bhd (KLSE:CAELY) Full Year 2022 ResultsKey Financial Results Revenue: RM58.6m (down 2.2% from FY 2021). Net loss: RM7.72m (loss narrowed by 37% from FY 2021). RM0.03 loss per share (improved from RM0.059 loss in FY 2021).  KLSE:CAELY Earnings and Revenue History November 3rd 2022 All figures shown in the chart above are for the trailing 12 month (TTM) period Caely Holdings Bhd shares are down 5.0% from a week ago.   Risk Analysis Be aware that  Caely Holdings Bhd is showing  3 warning signs in our investment analysis and 1 of those shouldn't be ignored...Valuation is complex, but we're helping make it simple.Find out whether Classita Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


CAM Resources Berhad First Quarter 2023 Earnings: EPS: RM0.007 (vs RM0.007 in 1Q 2022)

CAM Resources Berhad (KLSE:CAMRES) First Quarter 2023 ResultsKey Financial Results Revenue: RM87.3m (down 35% from 1Q 2022). Net income: RM1.23m (down 6.5% from 1Q 2022). Profit margin: 1.4% (up from 1.0% in 1Q 2022). The increase in margin was driven by lower expenses. EPS: RM0.007 (in line with 1Q 2022).  KLSE:CAMRES Earnings and Revenue History June 2nd 2023 All figures shown in the chart above are for the trailing 12 month (TTM) period CAM Resources Berhad shares are down 2.6% from a week ago.   Risk Analysis It's still necessary to consider the ever-present spectre of investment risk.   We've identified 1 warning sign  with CAM Resources Berhad, and understanding this should be part of your investment process. Valuation is complex, but we're helping make it simple.Find out whether CAM Resources Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


CAM Resources Berhad (KLSE:CAMRES) Is Looking To Continue Growing Its Returns On Capital

To find a multi-bagger stock, what are the underlying trends we should look for in a business?  Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding 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.    Speaking of which, we noticed some great changes in CAM Resources Berhad's (KLSE:CAMRES) returns on capital, so let's have a look.     Return On Capital Employed (ROCE): What Is It?  If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business.  Analysts use this formula to calculate it for CAM Resources Berhad:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.12 = RM17m ÷ (RM192m - RM49m) (Based on the trailing twelve months to June 2022). Thus, CAM Resources Berhad has an ROCE of 12%.  That's a pretty standard return and it's in line with the industry average of 12%.    Our analysis indicates that CAMRES is potentially undervalued!   KLSE:CAMRES Return on Capital Employed November 8th 2022 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, revenue and cash flow of CAM Resources Berhad, check out these free graphs here.  What Does the ROCE Trend For CAM Resources Berhad Tell Us?  CAM Resources Berhad is showing promise given that its ROCE is trending up and to the right.   Looking at the data, we can see that even though capital employed in the business has remained relatively flat, the ROCE generated has risen by 61% over the last  five years.  So our take on this is that the business has increased efficiencies to generate these higher returns, all the while not needing to make any additional investments.  The company is doing well in that sense, and it's worth investigating what the management team has planned for long term growth prospects.    What We Can Learn From CAM Resources Berhad's ROCE  As discussed above, CAM Resources Berhad appears to be getting more proficient at generating returns since capital employed has remained flat but earnings (before interest and tax) are up.     Considering the stock has delivered 12% to its stockholders over the last  five years, it may be fair to think that investors aren't fully aware of the promising trends yet.  Given that, we'd look further into this stock in case it has more traits that could make it multiply in the long term.    CAM Resources Berhad does have some risks though, and we've spotted   3 warning signs for CAM Resources Berhad  that you might be interested in.     While CAM Resources 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. Valuation is complex, but we're helping make it simple.Find out whether CAM Resources Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


We Ran A Stock Scan For Earnings Growth And CAM Resources Berhad (KLSE:CAMRES) Passed With Ease

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit.  Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.  Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.  Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like CAM Resources Berhad (KLSE:CAMRES). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.  View our latest analysis for CAM Resources Berhad   How Fast Is CAM Resources Berhad Growing Its Earnings Per Share?  In the last three years CAM Resources Berhad's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates.  As a result, we'll zoom in on growth over the last year, instead.    Outstandingly, CAM Resources Berhad's EPS shot from RM0.035 to RM0.062, over the last year.  Year on year growth of 76% is certainly a sight to behold.   The best case scenario? That the business has hit a true inflection point.    Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market.    CAM Resources Berhad maintained stable EBIT margins over the last year, all while growing revenue 63% to RM511m.  That's progress.    The chart below shows how the company's bottom and top lines have progressed over time.  To see the actual numbers, click on the chart. KLSE:CAMRES Earnings and Revenue History September 7th 2022  Since CAM Resources Berhad is no giant, with a market capitalisation of RM63m, you should definitely check its cash and debt before getting too excited about its prospects.  Are CAM Resources Berhad Insiders Aligned With All Shareholders?  Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders.  So as you can imagine, the fact that CAM Resources Berhad insiders own a significant number of shares certainly is appealing.    Indeed, with a collective holding of 57%, company insiders are in control and have plenty of capital behind the venture.  This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy.    Valued at only RM63m CAM Resources Berhad is really small for a listed company.  That means insiders only have RM36m worth of shares, despite the large proportional holding.  That might not be a huge sum but it should be enough to keep insiders motivated!    While it's always good to see some strong conviction in the company from insiders through heavy investment, it's also important for shareholders to ask if management compensation policies are reasonable.  Well, based on the CEO pay, you'd argue that they are indeed.    The median total compensation for CEOs of companies similar in size to CAM Resources Berhad, with market caps under RM898m is around RM497k.   The CAM Resources Berhad CEO received total compensation of only RM30k in the year to December 2021.  This total may indicate that the CEO is sacrificing take home pay for performance-based benefits, ensuring that their motivations are synonymous with strong company results.   While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind.  It can also be a sign of good governance, more generally.   Does CAM Resources Berhad Deserve A Spot On Your Watchlist?  CAM Resources Berhad's earnings per share have been soaring, with growth rates sky high.   The sweetener is that insiders have a mountain of stock, and the CEO remuneration is quite reasonable.  The strong EPS improvement suggests the businesses is humming along.  CAM Resources Berhad certainly ticks a few boxes, so we think it's probably well worth further consideration.     It's still necessary to consider the ever-present spectre of investment risk.   We've identified 2 warning signs  with CAM Resources Berhad , and understanding these should be part of your investment process.   The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.Valuation is complex, but we're helping make it simple.Find out whether CAM Resources Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


We Think CAM Resources Berhad (KLSE:CAMRES) Can Manage Its Debt With Ease

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.'  It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses.  We note that CAM Resources Berhad (KLSE:CAMRES) does have debt on its balance sheet.  But is this debt a concern to shareholders?  When Is Debt A Problem?  Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price.  Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers.  However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet.  Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage.  The first step when considering a company's debt levels is to consider its cash and debt together.   See our latest analysis for CAM Resources Berhad  How Much Debt Does CAM Resources Berhad Carry?  The image below, which you can click on for greater detail, shows that CAM Resources Berhad had debt of RM25.7m at the end of March 2023, a reduction from RM33.5m over a year.    But on the other hand it also has RM29.0m in cash, leading to a RM3.23m net cash position.  KLSE:CAMRES Debt to Equity History July 3rd 2023 How Strong Is CAM Resources Berhad's Balance Sheet?  We can see from the most recent balance sheet that CAM Resources Berhad had liabilities of RM36.5m falling due within a year, and liabilities of RM11.2m due beyond that.   On the other hand, it had cash of RM29.0m and RM16.6m worth of receivables due within a year.   So its liabilities outweigh the sum of its cash and (near-term) receivables by RM2.18m.    Given CAM Resources Berhad has a market capitalization of RM73.5m, it's hard to believe these liabilities pose much threat.  Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse.    While it does have liabilities worth noting, CAM Resources Berhad also has more cash than debt, so we're pretty confident it can manage its debt safely.    In addition to that, we're happy to report that CAM Resources Berhad has boosted its EBIT by 48%, thus reducing the spectre of future debt repayments.      There's no doubt that we learn most about debt from the balance sheet.  But you can't view debt in total isolation; since CAM Resources Berhad will need earnings to service that debt.  So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.  But our final consideration is also important, because a company cannot pay debt with paper profits; it needs cold hard cash.   CAM Resources Berhad may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt.    Over the last three years, CAM Resources Berhad actually produced more free cash flow than EBIT.  That sort of strong cash generation warms our hearts like a puppy in a bumblebee suit.    Summing Up We could understand if investors are concerned about CAM Resources Berhad's liabilities, but we can be reassured by the fact it has has net cash of RM3.23m.     The cherry on top was that in converted 108% of that EBIT to free cash flow, bringing in RM11m.     So is CAM Resources Berhad's debt a risk? It doesn't seem so to us.    When analysing debt levels, the balance sheet is the obvious place to start.  However, not all investment risk resides within the balance sheet - far from it.   Be aware that  CAM Resources Berhad is showing  1 warning sign in our investment analysis , you should know about...      When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now. Valuation is complex, but we're helping make it simple.Find out whether CAM Resources Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Cheetah Holdings Berhad Full Year 2022 Earnings: RM0.017 loss per share (vs RM0.02 profit in FY 2021)

Cheetah Holdings Berhad (KLSE:CHEETAH) Full Year 2022 ResultsKey Financial Results Revenue: RM145.4m (up 40% from FY 2021). Net loss: RM7.09m (down by 205% from RM6.74m profit in FY 2021). RM0.017 loss per share (down from RM0.02 profit in FY 2021).  KLSE:CHEETAH Earnings and Revenue History October 28th 2022 All figures shown in the chart above are for the trailing 12 month (TTM) period Cheetah Holdings Berhad shares are up 4.3% from a week ago.   Risk Analysis We should say that we've discovered 4 warning signs for Cheetah Holdings Berhad (1 can't be ignored!) that you should be aware of before investing here.Valuation is complex, but we're helping make it simple.Find out whether Cheetah Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Classita Holdings Berhad (KLSE:CLASSITA) Is Looking To Continue Growing Its Returns On Capital

If you're looking for a multi-bagger, there's a few things to keep an eye out for.  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.  This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns.    With that in mind, we've noticed some promising trends at Classita Holdings Berhad (KLSE:CLASSITA) so let's look a bit deeper.     Return On Capital Employed (ROCE): What Is It?  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.  To calculate this metric for Classita Holdings Berhad, this is the formula:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.034 = RM4.1m ÷ (RM137m - RM16m) (Based on the trailing twelve months to March 2023). Thus, Classita Holdings Berhad has an ROCE of 3.4%.  Ultimately, that's a low return and it under-performs the Luxury industry average of 13%.   View our latest analysis for Classita Holdings Berhad KLSE:CLASSITA Return on Capital Employed June 7th 2023 Historical performance is a great place to start when researching a stock so above you can see the gauge for Classita Holdings Berhad's ROCE against it's prior returns.  If you'd like to look at how Classita Holdings Berhad has performed in the past in other metrics, you can view this free graph of past earnings, revenue and cash flow.   How Are Returns Trending?  While in absolute terms it isn't a high ROCE, it's promising to see that it has been moving in the right direction.    The numbers show that in the last  five years, the returns generated on capital employed have grown considerably to 3.4%.  The company is effectively making more money per dollar of capital used, and it's worth noting that the amount of capital has increased too, by 25%.   So we're very much inspired by what we're seeing at Classita Holdings Berhad thanks to its ability to profitably reinvest capital.     In another part of our analysis, we noticed that the company's ratio of current liabilities to total assets decreased to 12%, which broadly means the business is relying less on its suppliers or short-term creditors to fund its operations.  This tells us that Classita Holdings Berhad has grown its returns without a reliance on increasing their current liabilities, which we're very happy with.     The Bottom Line  To sum it up, Classita Holdings Berhad has proven it can reinvest in the business and generate higher returns on that capital employed, which is terrific.        And since the stock has fallen 68% over the last  five years, there might be an opportunity here.   With that in mind, we believe the promising trends warrant this stock for further investigation.     Classita Holdings Berhad does come with some risks though, we found 6 warning signs in our investment analysis, and 3 of those are concerning...     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. Valuation is complex, but we're helping make it simple.Find out whether Classita Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Classita Holdings Berhad (KLSE:CLASSITA) Shares May Have Slumped 34% But Getting In Cheap Is Still Unlikely

Unfortunately for some shareholders, the Classita Holdings Berhad (KLSE:CLASSITA) share price has dived 34% in the last thirty days, prolonging recent pain.    For any long-term shareholders, the last month ends a year to forget by locking in a 72% share price decline.    In spite of the heavy fall in price, Classita Holdings Berhad's price-to-earnings (or "P/E") ratio of 26.2x might still make it look like a strong sell right now compared to the market in Malaysia, where around half of the companies have P/E ratios below 13x and even P/E's below 8x are quite common.  However, the P/E might be quite high for a reason and it requires further investigation to determine if it's justified.     We'd have to say that with no tangible growth over the last year, Classita Holdings Berhad's earnings have been unimpressive.   It might be that many are expecting an improvement to the uninspiring earnings performance over the coming period, which has kept the P/E from collapsing.  You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.     See our latest analysis for Classita Holdings Berhad KLSE:CLASSITA Price to Earnings Ratio vs Industry June 13th 2023 Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Classita Holdings Berhad will help you shine a light on its historical performance.   How Is Classita Holdings Berhad's Growth Trending?   The only time you'd be truly comfortable seeing a P/E as steep as Classita Holdings Berhad's is when the company's growth is on track to outshine the market decidedly.   If we review the last year of earnings, the company posted a result that saw barely any deviation from a year ago.   The longer-term trend has been no better as the company has no earnings growth to show for over the last three years either.  Accordingly, shareholders probably wouldn't have been satisfied with the complete absence of medium-term growth.     Weighing that recent medium-term earnings trajectory against the broader market's one-year forecast for expansion of 11% shows it's noticeably less attractive on an annualised basis.  In light of this, it's alarming that Classita Holdings Berhad's P/E sits above the majority of other companies.  Apparently many investors in the company are way more bullish than recent times would indicate and aren't willing to let go of their stock at any price.  There's a good chance existing shareholders are setting themselves up for future disappointment if the P/E falls to levels more in line with recent growth rates.    The Final Word  Even after such a strong price drop, Classita Holdings Berhad's P/E still exceeds the rest of the market significantly.      While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.  We've established that Classita Holdings Berhad currently trades on a much higher than expected P/E since its recent three-year growth is lower than the wider market forecast.  When we see weak earnings with slower than market growth, we suspect the share price is at risk of declining, sending the high P/E lower.  Unless the recent medium-term conditions improve markedly, it's very challenging to accept these prices as being reasonable.      It's always necessary to consider the ever-present spectre of investment risk. We've identified 6 warning signs with Classita Holdings Berhad (at least 3 which can't be ignored), and understanding them should be part of your investment process.   Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.  Valuation is complex, but we're helping make it simple.Find out whether Classita Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Estimating The Intrinsic Value Of Classita Holdings Berhad (KLSE:CLASSITA)

Does the January share price for Classita Holdings Berhad (KLSE:CLASSITA) reflect what it's really worth? Today, we will estimate the stock's intrinsic value  by taking the expected future cash flows and discounting them to their present value.  We will take advantage of the Discounted Cash Flow (DCF) model for this purpose.  Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow.  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.  If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.  See our latest analysis for Classita Holdings Berhad  Is Classita Holdings Berhad Fairly Valued?   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.  In the first stage we need to estimate the cash flows to the business over the next ten years.   Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last 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 need to discount the sum of these future cash flows to arrive at a present value estimate:  10-year free cash flow (FCF) forecast  2023 2024 2025 2026 2027 2028 2029 2030 2031 2032  Levered FCF (MYR, Millions)  RM7.71m RM8.10m RM8.48m RM8.84m RM9.20m RM9.57m RM9.93m RM10.3m RM10.7m RM11.1m Growth Rate Estimate Source Est @ 5.74% Est @ 5.08% Est @ 4.62% Est @ 4.30% Est @ 4.08% Est @ 3.92% Est @ 3.81% Est @ 3.73% Est @ 3.68% Est @ 3.64%  Present Value (MYR, Millions) Discounted @ 12%  RM6.9 RM6.5 RM6.1 RM5.7 RM5.3 RM4.9 RM4.5 RM4.2 RM3.9 RM3.6 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM52m 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.  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 12%. Terminal Value (TV)= FCF2032 × (1 + g) ÷ (r – g) = RM11m× (1 + 3.6%) ÷ (12%– 3.6%) = RM139mPresent Value of Terminal Value (PVTV)= TV / (1 + r)10= RM139m÷ ( 1 + 12%)10= RM45m The total value, or equity value, is then the sum of the present value of the future cash flows,  which in this case is RM97m.  The last step is to then divide the equity value by the number of shares outstanding.  Compared to the current share price of RM0.3, the company appears   around fair value    at the time of writing.   The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. KLSE:CLASSITA Discounted Cash Flow January 4th 2023  Important Assumptions  The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the 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 Classita 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 12%, which is based on a levered beta of 1.160. 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.  SWOT Analysis for Classita Holdings BerhadStrength Debt is not viewed as a risk. Balance sheet summary for CLASSITA. WeaknessDividend is low compared to the top 25% of dividend payers in the Luxury market. Current share price is above our estimate of fair value. Shareholders have been diluted in the past year.Opportunity Has sufficient cash runway for more than 3 years based on current free cash flows.Lack of analyst coverage makes it difficult to determine CLASSITA's earnings prospects.Threat Paying a dividend but company is unprofitable.  See CLASSITA's dividend history.  Looking Ahead:  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.  Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?"  If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different.  For Classita Holdings Berhad, we've compiled three  important  elements  you should explore:   Risks: For example, we've discovered 5 warning signs for Classita Holdings Berhad (2 can't be ignored!) that you should be aware of before investing here.   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!  Other Top Analyst Picks: Interested to see what the analysts are thinking? Take a look at our interactive list of analysts' top stock picks to find out what they feel might have an attractive future outlook!   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.Valuation is complex, but we're helping make it simple.Find out whether Classita Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


CSH Alliance Berhad Full Year 2022 Earnings: RM0.008 loss per share (vs RM0.044 loss in FY 2021)

CSH Alliance Berhad (KLSE:CSH) Full Year 2022 ResultsKey Financial Results Revenue: RM37.3m (up 120% from FY 2021). Net loss: RM8.04m (loss narrowed by 52% from FY 2021). RM0.008 loss per share (improved from RM0.044 loss in FY 2021).  KLSE:CSH Earnings and Revenue History October 31st 2022 All figures shown in the chart above are for the trailing 12 month (TTM) period CSH Alliance Berhad shares are down 25% from a week ago.   Risk Analysis Before you take the next step you should know about the 4 warning signs for CSH Alliance Berhad that we have uncovered.Valuation is complex, but we're helping make it simple.Find out whether CSH Alliance Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


DPS Resources Berhad Third Quarter 2023 Earnings: EPS: RM0.001 (vs RM0.002 in 3Q 2022)

DPS Resources Berhad (KLSE:DPS) Third Quarter 2023 ResultsKey Financial Results Revenue: RM10.6m (down 62% from 3Q 2022). Net income: RM713.0k (down 39% from 3Q 2022). Profit margin: 6.8% (up from 4.2% in 3Q 2022). The increase in margin was driven by lower expenses. EPS: RM0.001 (down from RM0.002 in 3Q 2022).  KLSE:DPS Earnings and Revenue History February 27th 2023 All figures shown in the chart above are for the trailing 12 month (TTM) period DPS Resources Berhad's share price is broadly unchanged from a week ago.   Risk Analysis Don't forget that there may still be risks. For instance, we've identified   3 warning signs for DPS Resources Berhad  that you should be aware of. Valuation is complex, but we're helping make it simple.Find out whether DPS Resources Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Is DPS Resources Berhad (KLSE:DPS) Using Too Much Debt?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.'  So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is.  Importantly, DPS Resources Berhad (KLSE:DPS) does carry debt.  But should shareholders be worried about its use of debt?  What Risk Does Debt Bring?  Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow.  Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing.  While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price.  Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage.  The first step when considering a company's debt levels is to consider its cash and debt together.   Check out our latest analysis for DPS Resources Berhad  How Much Debt Does DPS Resources Berhad Carry?  The image below, which you can click on for greater detail, shows that at September 2022 DPS Resources Berhad had debt of RM20.8m, up from RM9.38m in one year.    However, it also had RM14.2m in cash, and so its net debt is RM6.62m.  KLSE:DPS Debt to Equity History January 21st 2023 How Healthy Is DPS Resources Berhad's Balance Sheet?  Zooming in on the latest balance sheet data, we can see that DPS Resources Berhad had liabilities of RM29.4m due within 12 months and liabilities of RM24.4m due beyond that.    Offsetting these obligations, it had cash of RM14.2m as well as receivables valued at RM32.0m due within 12 months.   So its liabilities outweigh the sum of its cash and (near-term) receivables by RM7.63m.    Given DPS Resources Berhad has a market capitalization of RM63.5m, it's hard to believe these liabilities pose much threat.  Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse.    In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover).  Thus we consider debt relative to earnings both with and without depreciation and amortization expenses.   Looking at its net debt to EBITDA of 1.0 and interest cover of 6.8 times, it seems to us that DPS Resources Berhad is probably using debt in a pretty reasonable way.  But the interest payments are certainly sufficient to have us thinking about how affordable its debt is.        The modesty of its debt load may become crucial for DPS Resources Berhad if management cannot prevent a repeat of the 77% cut to EBIT over the last year.  Falling earnings (if the trend continues) could eventually make even modest debt quite risky.      When analysing debt levels, the balance sheet is the obvious place to start.  But you can't view debt in total isolation; since DPS Resources Berhad will need earnings to service that debt.  So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.  Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash.   So the logical step is to look at the proportion of that EBIT that is matched by actual free cash flow.    During the last three years, DPS Resources Berhad burned a lot of cash.  While investors are no doubt expecting a reversal of that situation in due course, it clearly does mean its use of debt is more risky.    Our View To be frank both DPS Resources Berhad's conversion of EBIT to free cash flow and its track record of (not) growing its EBIT make us rather uncomfortable with its debt levels.    But at least it's pretty decent at managing its debt, based on its EBITDA,; that's encouraging.      Once we consider all the factors above, together, it seems to us that DPS Resources Berhad's debt is making it a bit risky.  That's not necessarily a bad thing, but we'd generally feel more comfortable with less leverage.    When analysing debt levels, the balance sheet is the obvious place to start.  However, not all investment risk resides within the balance sheet - far from it.   For example DPS Resources Berhad has   3 warning signs  (and 1 which shouldn't be ignored)  we think you should know about.     At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free. Valuation is complex, but we're helping make it simple.Find out whether DPS Resources Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.


Returns On Capital Are Showing Encouraging Signs At DPS Resources Berhad (KLSE:DPS)

What trends should we look for it we want to identify stocks that can multiply in value over the long term?  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.    With that in mind, we've noticed some promising trends at DPS Resources Berhad (KLSE:DPS) so let's look a bit deeper.     What Is Return On Capital Employed (ROCE)?  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.  The formula for this calculation on DPS Resources Berhad is:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.023 = RM4.2m ÷ (RM217m - RM32m) (Based on the trailing twelve months to March 2023). So, DPS Resources Berhad has an ROCE of 2.3%.  Ultimately, that's a low return and it under-performs the Consumer Durables industry average of 8.6%.   View our latest analysis for DPS Resources Berhad KLSE:DPS Return on Capital Employed July 14th 2023 Historical performance is a great place to start when researching a stock so above you can see the gauge for DPS Resources Berhad's ROCE against it's prior returns.  If you'd like to look at how DPS Resources Berhad has performed in the past in other metrics, you can view this free graph of past earnings, revenue and cash flow.  What Does the ROCE Trend For DPS Resources Berhad Tell Us?  DPS Resources Berhad has recently broken into profitability so their prior investments seem to be paying off.  Shareholders would no doubt be pleased with this because the business was loss-making  five years ago but is is now generating 2.3% on its capital.  Not only that, but the company is utilizing 59% more capital than before, but that's to be expected from a company trying to break into profitability.  We like this trend, because it tells us the company has profitable reinvestment opportunities available to it, and if it continues going forward that can lead to a multi-bagger performance.    The Bottom Line On DPS Resources Berhad's ROCE  To the delight of most shareholders, DPS Resources Berhad has now broken into profitability.      Since the stock has only returned 6.7% to shareholders over the last  five years, the promising fundamentals may not be recognized yet by investors.   Given that, we'd look further into this stock in case it has more traits that could make it multiply in the long term.    If you'd like to know about the risks facing DPS Resources Berhad, we've discovered 1 warning sign 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. Valuation is complex, but we're helping make it simple.Find out whether DPS Resources Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This 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.