ABM Fujiya Berhad Full Year 2022 Earnings: RM0.012 loss per share (vs RM0.008 profit in FY 2021)

ABM Fujiya Berhad (KLSE:AFUJIYA) Full Year 2022 ResultsKey Financial Results Revenue: RM100.8m (up 11% from FY 2021). Net loss: RM2.12m (down by 240% from RM1.51m profit in FY 2021). RM0.012 loss per share (down from RM0.008 profit in FY 2021).  KLSE:AFUJIYA Earnings and Revenue History March 3rd 2023 All figures shown in the chart above are for the trailing 12 month (TTM) period ABM Fujiya Berhad shares are up 6.3% from a week ago.   Risk Analysis We don't want to rain on the parade too much, but we did also find 4 warning signs for ABM Fujiya Berhad (3 are potentially serious!) that you need to be mindful of. Valuation is complex, but we're helping make it simple.Find out whether ABM Fujiya 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.


ABM Fujiya Berhad (KLSE:AFUJIYA) Use Of Debt Could Be Considered Risky

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.  We note that ABM Fujiya Berhad (KLSE:AFUJIYA) does have debt on its balance sheet.  But should shareholders be worried about its use of debt?  Why Does Debt Bring Risk?  Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow.   Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers.  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.  Of course, plenty of companies use debt to fund growth, without any negative consequences.  When we examine debt levels, we first consider both cash and debt levels, together.   View our latest analysis for ABM Fujiya Berhad  What Is ABM Fujiya Berhad's Debt?  You can click the graphic below for the historical numbers, but it shows that as of March 2022 ABM Fujiya Berhad had RM91.8m of debt, an increase on RM66.0m, over one year.    However, it does have RM6.78m in cash offsetting this, leading to net debt of about RM85.0m.  KLSE:AFUJIYA Debt to Equity History July 30th 2022 A Look At ABM Fujiya Berhad's Liabilities  According to the last reported balance sheet, ABM Fujiya Berhad had liabilities of RM142.9m due within 12 months, and liabilities of RM11.3m due beyond 12 months.   Offsetting this, it had RM6.78m in cash and RM54.6m in receivables that were due within 12 months.   So its liabilities total RM92.8m more than the combination of its cash and short-term receivables.   Given this deficit is actually higher than the company's  market capitalization of RM64.8m, we think shareholders really should watch ABM Fujiya Berhad's debt levels, like a parent watching their child ride a bike for the first time.  Hypothetically, extremely heavy dilution would be required if the company were forced to pay down its liabilities by raising capital at the current share price.    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).  This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.   Weak interest cover of 1.3 times and a disturbingly high net debt to EBITDA ratio of 8.2 hit our confidence in ABM Fujiya Berhad like a one-two punch to the gut.  The debt burden here is substantial.        Worse, ABM Fujiya Berhad's EBIT was down 43% over the last year.   If earnings continue to follow that trajectory, paying off that debt load will be harder than convincing us to run a marathon in the rain.      When analysing debt levels, the balance sheet is the obvious place to start.  But you can't view debt in total isolation; since ABM Fujiya Berhad will need earnings to service that debt.  So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.  Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it.   So the logical step is to look at the proportion of that EBIT that is matched by actual free cash flow.    Over the last three years, ABM Fujiya Berhad recorded negative free cash flow, in total.  Debt is usually more expensive, and almost always more risky in the hands of a company with negative free cash flow. Shareholders ought to hope for an improvement.    Our View To be frank both ABM Fujiya Berhad's net debt to EBITDA and its track record of (not) growing its EBIT make us rather uncomfortable with its debt levels.    And furthermore, its level of total liabilities also fails to instill confidence.      Considering everything we've mentioned above, it's fair to say that ABM Fujiya Berhad is carrying heavy debt load.  If you harvest honey without a bee suit, you risk getting stung, so we'd probably stay away from this particular stock.    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 4 warning signs for ABM Fujiya Berhad (3 are concerning!) that you should be aware of before investing here.     If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay. Valuation is complex, but we're helping make it simple.Find out whether ABM Fujiya 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.


These Return Metrics Don't Make ABM Fujiya Berhad (KLSE:AFUJIYA) Look Too Strong

What underlying fundamental trends can indicate that a company might be in decline?  More often than not, we'll see a declining return on capital employed (ROCE) and a declining amount of capital employed.  Ultimately this means that the company is earning less per dollar invested and on top of that, it's shrinking its base of capital employed.  So after glancing at the trends within ABM Fujiya Berhad (KLSE:AFUJIYA), we weren't too hopeful.   What Is Return On Capital Employed (ROCE)?  If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business.  To calculate this metric for ABM Fujiya Berhad, this is the formula:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.019 = RM3.4m ÷ (RM395m - RM215m) (Based on the trailing twelve months to March 2023). Thus, ABM Fujiya Berhad has an ROCE of 1.9%.  In absolute terms, that's a low return and it also under-performs the Auto Components industry average of 9.4%.   View our latest analysis for ABM Fujiya Berhad KLSE:AFUJIYA Return on Capital Employed June 9th 2023 Historical performance is a great place to start when researching a stock so above you can see the gauge for ABM Fujiya Berhad's ROCE against it's prior returns.  If you'd like to look at how ABM Fujiya 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 ABM Fujiya Berhad Tell Us?  We are a bit worried about the trend of returns on capital at ABM Fujiya Berhad.  Unfortunately the returns on capital have diminished from the 5.3% that they were earning  five years ago.  Meanwhile, capital employed in the business has stayed roughly the flat over the period.  Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition.  So because these trends aren't typically conducive to creating a multi-bagger, we wouldn't hold our breath on ABM Fujiya Berhad becoming one if things continue as they have.    On a side note, ABM Fujiya Berhad's current liabilities have increased over the last  five years to 54% of total assets, effectively distorting the ROCE to some degree.  Without this increase, it's likely that ROCE would be even lower than 1.9%.   And with current liabilities at these levels, suppliers or short-term creditors are effectively funding a large part of the business, which can introduce some risks.       In Conclusion...  In the end, the trend of lower returns on the same amount of capital isn't typically an indication that we're looking at a growth stock.      Investors haven't taken kindly to these developments, since the stock has declined 20% from where it was  five years ago.   That being the case, unless the underlying trends revert to a more positive trajectory, we'd consider looking elsewhere.    ABM Fujiya Berhad does come with some risks though, we found 4 warning signs in our investment analysis, and 3 of those are concerning...     While ABM Fujiya Berhad may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. Valuation is complex, but we're helping make it simple.Find out whether ABM Fujiya 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.


APM Automotive Holdings Berhad Third Quarter 2022 Earnings: EPS: RM0.042 (vs RM0.13 loss in 3Q 2021)

APM Automotive Holdings Berhad (KLSE:APM) Third Quarter 2022 ResultsKey Financial Results Revenue: RM467.8m (up 168% from 3Q 2021). Net income: RM8.11m (up from RM25.7m loss in 3Q 2021). Profit margin: 1.7% (up from net loss in 3Q 2021). The move to profitability was driven by higher revenue. EPS: RM0.042 (up from RM0.13 loss in 3Q 2021).  KLSE:APM Earnings and Revenue History November 22nd 2022 All figures shown in the chart above are for the trailing 12 month (TTM) period APM Automotive Holdings Berhad shares are up 4.9% from a week ago.   Risk Analysis Before we wrap up, we've discovered 3 warning signs for APM Automotive Holdings Berhad (1 makes us a bit uncomfortable!) that you should be aware of. Valuation is complex, but we're helping make it simple.Find out whether APM Automotive 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.


Dividend Investors: Don't Be Too Quick To Buy APM Automotive Holdings Berhad (KLSE:APM) For Its Upcoming Dividend

Readers hoping to buy APM Automotive Holdings Berhad (KLSE:APM) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend.  Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend.  The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date.   In other words, investors can purchase APM Automotive Holdings Berhad's shares before the 12th of April in order to be eligible for the dividend, which will be paid on the 10th of May.   The company's next dividend payment will be RM0.07 per share. Last year, in total, the company distributed RM0.14 to shareholders.  Based on the last year's worth of payments, APM Automotive Holdings Berhad stock has a trailing yield of around 6.8% on the current share price of MYR2.07.    If you buy this business for its dividend, you should have an idea of whether APM Automotive Holdings Berhad's dividend is reliable and sustainable.  So we need to investigate whether APM Automotive Holdings Berhad can afford its dividend, and if the dividend could grow.  Check out our latest analysis for APM Automotive Holdings Berhad  If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation.   APM Automotive Holdings Berhad paid out 104% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances.     A useful secondary check can be to evaluate whether APM Automotive Holdings Berhad generated enough free cash flow to afford its dividend.     Thankfully its dividend payments took up just 38% of the free cash flow it generated, which is a comfortable payout ratio.      It's disappointing to see that the dividend was not covered by profits, but cash is more important from a dividend sustainability perspective, and APM Automotive Holdings Berhad fortunately did generate enough cash to fund its dividend.  If executives were to continue paying more in dividends than the company reported in profits, we'd view this as a warning sign.  Very few companies are able to sustainably pay dividends larger than their reported earnings.   Click here to see how much of its profit APM Automotive Holdings Berhad paid out over the last 12 months. KLSE:APM Historic Dividend April 7th 2023 Have Earnings And Dividends Been Growing? Companies with falling earnings are riskier for dividend shareholders.   If earnings fall far enough, the company could be forced to cut its dividend.     With that in mind, we're discomforted by APM Automotive Holdings Berhad's 7.5% per annum decline in earnings in the past five years.  When earnings per share fall, the maximum amount of dividends that can be paid also falls.       Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth.     APM Automotive Holdings Berhad has seen its dividend decline 4.4% per annum on average over the past 10 years, which is not great to see.      While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.    Final Takeaway  Has APM Automotive Holdings Berhad got what it takes to maintain its dividend payments?      It's not a great combination to see a company with earnings in decline and paying out 104% of its profits, which could imply the dividend may be at risk of being cut in the future.  Yet cashflow was much stronger, which makes us wonder if there are some large timing issues in APM Automotive Holdings Berhad's cash flows, or perhaps the company has written down some assets aggressively, reducing its income.        It's not an attractive combination from a dividend perspective, and we're inclined to pass on this one for the time being.    Although, if you're still interested in APM Automotive Holdings Berhad and want to know more, you'll find it very useful to know what risks this stock faces.     For instance, we've identified 3 warning signs for APM Automotive Holdings Berhad (1 can't be ignored) you should be aware of.   Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers. Valuation is complex, but we're helping make it simple.Find out whether APM Automotive 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.


Despite delivering investors losses of 27% over the past 5 years, DRB-HICOM Berhad (KLSE:DRBHCOM) has been growing its earnings

The main aim of stock picking is to find the market-beating stocks.  But the main game is to find enough winners to more than offset the losers  So we wouldn't blame long term DRB-HICOM Berhad (KLSE:DRBHCOM) shareholders for doubting their decision to hold, with the stock down 32% over a half decade.    On the other hand the share price has bounced 8.4% over the last week.      On a more encouraging note the company has added RM232m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.   See our latest analysis for DRB-HICOM Berhad  SWOT Analysis for DRB-HICOM BerhadStrength  No major strengths identified for DRBHCOM.Weakness Interest payments on debt are not well covered.Dividend is low compared to the top 25% of dividend payers in the Auto market.Opportunity Good value based on P/E ratio and estimated fair value.  In-depth valuation analysis for DRBHCOM. ThreatDebt is not well covered by operating cash flow. Paying a dividend but company has no free cash flows. Annual earnings are forecast to decline for the next 3 years. Is DRBHCOM well equipped to handle threats?   There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance.  One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.   During five years of share price growth, DRB-HICOM Berhad moved from a loss to profitability.    That would generally be considered a positive, so we are surprised to see the share price is down.   Other metrics may better explain the share price move.  The modest 1.3% dividend yield is unlikely to be guiding the market view of the stock.    Revenue is actually up 3.2% over the time period.  So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be an opportunity.      The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail). KLSE:DRBHCOM Earnings and Revenue Growth April 11th 2023 We know that DRB-HICOM Berhad has improved its bottom line lately, but what does the future have in store?  You can see what analysts are predicting for DRB-HICOM Berhad in this interactive graph of future profit estimates.  What About Dividends? It is important to consider the total shareholder return, as well as the share price return, for any given stock.  Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off.  Arguably, the TSR gives a more comprehensive picture of the return generated by a stock.  As it happens, DRB-HICOM Berhad's TSR for the last 5 years was -27%, which exceeds the share price return mentioned earlier.  The dividends paid by the company have thusly boosted the total shareholder return.  A Different Perspective It's good to see that DRB-HICOM Berhad has rewarded shareholders with a total shareholder return of 6.5% in the last twelve months.   And that does include the dividend.     Notably the five-year annualised TSR loss of 5% per year compares very unfavourably with the recent share price performance.  This makes us a little wary, but the business might have turned around its fortunes.        While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important.   For example, we've discovered 2 warning signs for DRB-HICOM Berhad that you should be aware of before investing here.    If you are like me, then you will not want to miss this free list of growing companies that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges.Valuation is complex, but we're helping make it simple.Find out whether DRB-HICOM 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.


DRB-HICOM Berhad (KLSE:DRBHCOM) Looks Like A Good Stock, And It's Going Ex-Dividend Soon

DRB-HICOM Berhad (KLSE:DRBHCOM) is about to trade ex-dividend in the next day or so.  The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company's books in order to receive a 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.   Meaning, you will need to purchase DRB-HICOM Berhad's shares before the 30th of May to receive the dividend, which will be paid on the 28th of June.   The company's next dividend payment will be RM0.02 per share, and in the last 12 months, the company paid a total of RM0.02 per share.  Based on the last year's worth of payments, DRB-HICOM Berhad has a trailing yield of 1.5% on the current stock price of MYR1.35.    Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends.  So we need to investigate whether DRB-HICOM Berhad can afford its dividend, and if the dividend could grow.  See our latest analysis for DRB-HICOM Berhad  Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut.   DRB-HICOM Berhad paid out just 9.3% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.     A useful secondary check can be to evaluate whether DRB-HICOM Berhad generated enough free cash flow to afford its dividend.     The good news is it paid out just 3.7% of its free cash flow in the last year.      It's positive to see that DRB-HICOM Berhad's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.   Click here to see the company's payout ratio, plus analyst estimates of its future dividends. KLSE:DRBHCOM Historic Dividend May 28th 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.     That's why it's comforting to see DRB-HICOM Berhad's earnings have been skyrocketing, up 21% per annum for the past five years.        DRB-HICOM Berhad looks like a real growth company, with earnings per share growing at a cracking pace and the company reinvesting most of its profits in the business.      We'd also point out that DRB-HICOM Berhad issued a meaningful number of new shares in the past year.  It's hard to grow dividends per share when a company keeps creating new shares.   Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time.     DRB-HICOM Berhad's dividend payments per share have declined at 10% per year on average over the past 10 years, which is uninspiring.      DRB-HICOM Berhad is a rare case where dividends have been decreasing at the same time as earnings per share have been improving. It's unusual to see, and could point to unstable conditions in the core business, or more rarely an intensified focus on reinvesting profits.    Final Takeaway  Should investors buy DRB-HICOM Berhad for the upcoming dividend?       It's great that DRB-HICOM Berhad is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It's disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like.         DRB-HICOM Berhad looks solid on this analysis overall, and we'd definitely consider investigating it more closely.    Curious what other investors think of DRB-HICOM Berhad? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.  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 DRB-HICOM 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.


DRB-HICOM Berhad (KLSE:DRBHCOM) Seems To Be Using A Lot Of Debt

Warren Buffett famously said, 'Volatility is far from synonymous with risk.'  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.  Importantly, DRB-HICOM Berhad (KLSE:DRBHCOM) does carry debt.  But is this debt a concern to shareholders?  Why Does Debt Bring Risk?  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 usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control.  Of course, plenty of companies use debt to fund growth, without any negative consequences.  The first step when considering a company's debt levels is to consider its cash and debt together.   View our latest analysis for DRB-HICOM Berhad  What Is DRB-HICOM Berhad's Net Debt?  You can click the graphic below for the historical numbers, but it shows that DRB-HICOM Berhad had RM8.94b of debt in September 2022, down from RM9.39b, one year before.    However, because it has a cash reserve of RM4.36b, its net debt is less, at about RM4.57b.  KLSE:DRBHCOM Debt to Equity History December 19th 2022 How Strong Is DRB-HICOM Berhad's Balance Sheet?  The latest balance sheet data shows that DRB-HICOM Berhad had liabilities of RM30.6b due within a year, and liabilities of RM9.59b falling due after that.   Offsetting this, it had RM4.36b in cash and RM8.03b in receivables that were due within 12 months.   So its liabilities total RM27.8b more than the combination of its cash and short-term receivables.   This deficit casts a shadow over the RM3.05b company, like a colossus towering over mere mortals.   So we definitely think shareholders need to watch this one closely.  After all, DRB-HICOM Berhad would likely require a major re-capitalisation if it had to pay its creditors today.    We measure a company's debt load relative to its earnings power by looking at its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and by calculating how easily its earnings before interest and tax (EBIT) cover its interest expense (interest cover).  This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.   While DRB-HICOM Berhad's debt to EBITDA ratio (3.4) suggests that it uses some debt, its interest cover is very weak, at 1.7, suggesting high leverage.  So shareholders should probably be aware that interest expenses appear to have really impacted the business lately.        Even more troubling is the fact that DRB-HICOM Berhad actually let its EBIT decrease by 8.4% over the last year.  If that earnings trend continues the company will face an uphill battle to pay off its debt.      When analysing debt levels, the balance sheet is the obvious place to start.  But ultimately the future profitability of the business will decide if DRB-HICOM Berhad can strengthen its balance sheet over time.  So if you're focused on the future you can check out this free report showing analyst profit forecasts.  Finally, a company can only pay off debt with cold hard cash, not accounting profits.   So we always check how much of that EBIT is translated into free cash flow.    Over the last three years, DRB-HICOM Berhad saw substantial negative free cash flow, in total.  While that may be a result of expenditure for growth, it does make the debt far more risky.    Our View On the face of it, DRB-HICOM Berhad's conversion of EBIT to free cash flow left us tentative about the stock, and its level of total liabilities was no more enticing than the one empty restaurant on the busiest night of the year.    And furthermore, its EBIT growth rate also fails to instill confidence.      We think the chances that DRB-HICOM Berhad has too much debt a very significant.  To us, that makes the stock rather risky, like walking through a dog park with your eyes closed. But some investors may feel differently.    The balance sheet is clearly the area to focus on when you are analysing debt.  But ultimately, every company can contain risks that exist outside of the balance sheet.   For instance, we've identified   2 warning signs for DRB-HICOM Berhad (1 makes us a bit uncomfortable)  you should be aware of.     Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today. Valuation is complex, but we're helping make it simple.Find out whether DRB-HICOM 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.


DRB-HICOM Berhad Third Quarter 2022 Earnings: EPS: RM0.075 (vs RM0.093 loss in 3Q 2021)

DRB-HICOM Berhad (KLSE:DRBHCOM) Third Quarter 2022 ResultsKey Financial Results Revenue: RM4.54b (up 114% from 3Q 2021). Net income: RM146.3m (up from RM179.4m loss in 3Q 2021). Profit margin: 3.2% (up from net loss in 3Q 2021). The move to profitability was driven by higher revenue. EPS: RM0.075 (up from RM0.093 loss in 3Q 2021).  KLSE:DRBHCOM Earnings and Revenue Growth November 25th 2022 All figures shown in the chart above are for the trailing 12 month (TTM) period DRB-HICOM Berhad Earnings Insights  Looking ahead, revenue is forecast to grow 5.0% p.a. on average during the next 3 years, compared to a 11% growth forecast for the Auto industry in Asia.    Performance of the market in Malaysia.  The company's shares are up 8.3% from a week ago.   Risk Analysis You should always think about risks. Case in point, we've spotted   2 warning signs for DRB-HICOM Berhad  you should be aware of, and 1 of them is significant.  Valuation is complex, but we're helping make it simple.Find out whether DRB-HICOM 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 DRB-HICOM Berhad (KLSE:DRBHCOM) Potentially Undervalued?

DRB-HICOM Berhad (KLSE:DRBHCOM), is not the largest company out there, but it     saw a decent share price growth in the teens level on the KLSE over the last few months.    As a stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock.  However, could the stock still be trading at a relatively cheap price?  Let’s examine DRB-HICOM Berhad’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.     Check out our latest analysis for DRB-HICOM Berhad  What's The Opportunity In DRB-HICOM Berhad?  Great news for investors – DRB-HICOM Berhad is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average.  I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 4.98x is currently well-below the industry average of 15.21x, meaning that it is trading at a cheaper price relative to its peers.   DRB-HICOM Berhad’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.      What kind of growth will DRB-HICOM Berhad generate? KLSE:DRBHCOM Earnings and Revenue Growth February 22nd 2023 Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio.   Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price.    Though in the case of DRB-HICOM Berhad, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.    What This Means For You Are you a shareholder? Although DRBHCOM is currently trading below the industry PE ratio,  the negative profit outlook does bring on some uncertainty, which equates to higher risk.  I recommend you think about  whether you want to increase your portfolio exposure to DRBHCOM, or whether diversifying into another stock may be a better move for your total risk and return. Are you a potential investor? If you’ve been  keeping an eye on DRBHCOM for a while,  but hesitant on making the leap, I recommend you  research further into the stock.  Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.   Keep in mind, when it comes to analysing a stock it's worth noting the risks involved.   Every company has risks, and we've spotted 2 warning signs for DRB-HICOM Berhad you should know about.    If you are no longer interested in DRB-HICOM Berhad, you can use our free platform to see our list of over 50 other stocks with a high growth potential. Valuation is complex, but we're helping make it simple.Find out whether DRB-HICOM 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.


Painful week for private companies invested in DRB-HICOM Berhad (KLSE:DRBHCOM) after 10% drop, institutions also suffered losses

If you want to know who really controls DRB-HICOM Berhad (KLSE:DRBHCOM), then you'll have to look at the makeup of its share registry.  We can see that private companies own the lion's share in the company with 57% ownership.  Put another way, the group faces the maximum upside potential (or downside risk).  While institutions who own 23% came under pressure after market cap dropped to RM2.7b last week,private companies took the most losses.      In the chart below, we zoom in on the different ownership groups of DRB-HICOM Berhad.  If you're not interested in researching DRBHCOM's ownership structure, we have a free list of interesting investing ideas  to potentially inspire your next investment! KLSE:DRBHCOM Ownership Breakdown September 21st 2022 What Does The Institutional Ownership Tell Us About DRB-HICOM Berhad? Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.   DRB-HICOM Berhad already has institutions on the share registry. Indeed, they own a respectable stake in the company.  This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does.  When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see DRB-HICOM Berhad's historic earnings and revenue below, but keep in mind there's always more to the story. KLSE:DRBHCOM Earnings and Revenue Growth September 21st 2022  Hedge funds don't have many shares in DRB-HICOM Berhad.      Etika Strategi Sdn. Bhd. is currently the largest shareholder, with 56% of shares outstanding.   This implies that they have majority interest control of the future of the company.        In comparison, the second and third largest shareholders hold about 11% and 3.5% of the stock.    While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing.   As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.  Insider Ownership Of DRB-HICOM Berhad While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders.  Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.  Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.   Our most recent data indicates that insiders own less than 1% of DRB-HICOM Berhad.   However, it's possible that insiders might have an indirect interest through a more complex structure.    It appears that the board holds about RM25m worth of stock. This compares to a market capitalization of RM2.7b.  Many investors in smaller companies prefer to see the board more heavily invested. You can  click here to see if those insiders have been buying or selling.   General Public Ownership With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over DRB-HICOM Berhad.  While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.  Private Company Ownership We can see that Private Companies own 57%, of the shares on issue.  Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.   Next Steps: While it is well worth considering the different groups that own a company, there are other factors that are even more important.    To that end, you should learn about the   3 warning signs  we've spotted with DRB-HICOM Berhad (including 1 which is a bit concerning) .     Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.  NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.Valuation is complex, but we're helping make it simple.Find out whether DRB-HICOM 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 No Escaping DRB-HICOM Berhad's (KLSE:DRBHCOM) Muted Earnings Despite A 31% Share Price Rise

DRB-HICOM Berhad (KLSE:DRBHCOM) shareholders would be excited to see that the share price has had a great month, posting a 31% gain and recovering from prior weakness.    Looking further back, the 14% rise over the last twelve months isn't too bad notwithstanding the strength over the last 30 days.    Even after such a large jump in price, given close to half the companies in Malaysia have price-to-earnings ratios (or "P/E's") above 14x, you may still consider DRB-HICOM Berhad as an attractive investment with its 8.2x P/E ratio.  However, the P/E might be low for a reason and it requires further investigation to determine if it's justified.    While the market has experienced earnings growth lately, DRB-HICOM Berhad's earnings have gone into reverse gear, which is not great.   It seems that many are expecting the dour earnings performance to persist, which has repressed the P/E.  If you still like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.     View our latest analysis for DRB-HICOM Berhad KLSE:DRBHCOM Price Based on Past Earnings December 22nd 2022 Keen to find out how analysts think DRB-HICOM Berhad's future stacks up against the industry? In that case, our free report is a great place to start.  How Is DRB-HICOM Berhad's Growth Trending?   There's an inherent assumption that a company should underperform the market for P/E ratios like DRB-HICOM Berhad's to be considered reasonable.   Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 29%.   Still, the latest three year period has seen an excellent 41% overall rise in EPS, in spite of its unsatisfying short-term performance.  Although it's been a bumpy ride, it's still fair to say the earnings growth recently has been more than adequate for the company.     Turning to the outlook, the next year should bring diminished returns, with earnings decreasing 28%  as estimated by the six analysts watching the company.  With the market predicted to deliver 8.7% growth , that's a disappointing outcome.  In light of this, it's understandable that DRB-HICOM Berhad's P/E would sit below the majority of other companies.  However, shrinking earnings are unlikely to lead to a stable P/E over the longer term.  Even just maintaining these prices could be difficult to achieve as the weak outlook is weighing down the shares.    The Bottom Line On DRB-HICOM Berhad's P/E  Despite DRB-HICOM Berhad's shares building up a head of steam, its P/E still lags most other companies.     Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.  As we suspected, our examination of DRB-HICOM Berhad's analyst forecasts revealed that its outlook for shrinking earnings is contributing to its low P/E.  Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises.  It's hard to see the share price rising strongly in the near future under these circumstances.     Having said that, be aware DRB-HICOM Berhad is showing 2 warning signs in our investment analysis, and 1 of those is a bit unpleasant.   You might be able to find a better investment than DRB-HICOM 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 DRB-HICOM 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.


EP Manufacturing Bhd (KLSE:EPMB) delivers shareholders stellar 52% CAGR over 3 years, surging 12% in the last week alone

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero.  But in contrast you can make much more than 100% if the company does well.  For example, the EP Manufacturing Bhd (KLSE:EPMB) share price has soared 251% in the last three years.  Most would be happy with that.    It's also up 23% in about a month.    We note that EP Manufacturing Bhd reported its financial results recently; luckily, you can catch up on the latest revenue and profit numbers in our company report.  Since the stock has added RM24m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.    Before we look at the performance, you might like to know that our analysis indicates that EPMB is potentially overvalued!   EP Manufacturing Bhd wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option.  Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip.  That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.   EP Manufacturing Bhd actually saw its revenue drop by 11% per year over three years.   So we wouldn't have expected the share price to gain 52% per year, but it has.  It's a good reminder that expectations about the future, not the past history, always impact share prices.      You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image). KLSE:EPMB Earnings and Revenue Growth September 9th 2022 Take a more thorough look at EP Manufacturing Bhd's financial health with this free report on its balance sheet.  A Different Perspective We're pleased to report that EP Manufacturing Bhd shareholders have received a total shareholder return of 124% over one year.    That's better than the annualised return of 16% over half a decade, implying that the company is doing better recently.  In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper.        It's always interesting to track share price performance over the longer term. But to understand EP Manufacturing Bhd better, we need to consider many other factors.   Case in point: We've spotted   2 warning signs for EP Manufacturing Bhd  you should be aware of.     If you are like me, then you will not want to miss this free list of growing companies that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on MY exchanges.Valuation is complex, but we're helping make it simple.Find out whether EP Manufacturing Bhd 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.


EP Manufacturing Bhd Reports Third Quarter 2022 Earnings

EP Manufacturing Bhd (KLSE:EPMB) Third Quarter 2022 ResultsKey Financial Results Revenue: RM123.9m (up 197% from 3Q 2021). Net loss: RM560.0k (loss narrowed by 92% from 3Q 2021).  KLSE:EPMB Earnings and Revenue History December 4th 2022 All figures shown in the chart above are for the trailing 12 month (TTM) period EP Manufacturing Bhd shares are up 8.9% from a week ago.   Risk Analysis Before you take the next step you should know about the 2 warning signs for EP Manufacturing Bhd that we have uncovered. Valuation is complex, but we're helping make it simple.Find out whether EP Manufacturing Bhd 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.


EP Manufacturing Bhd's (KLSE:EPMB) Business Is Yet to Catch Up With Its Share Price

It's not a stretch to say that EP Manufacturing Bhd's  (KLSE:EPMB) price-to-sales (or "P/S") ratio of 0.4x right now seems quite "middle-of-the-road" for companies in the Auto Components industry in Malaysia, where the median P/S ratio is around 0.5x.  Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.      Check out our latest analysis for EP Manufacturing Bhd KLSE:EPMB Price to Sales Ratio vs Industry July 14th 2023 How EP Manufacturing Bhd Has Been Performing  EP Manufacturing Bhd certainly has been doing a great job lately as it's been growing its revenue at a really rapid pace.   The P/S is probably moderate because investors think this strong revenue growth might not be enough to outperform the broader industry in the near future.  Those who are bullish on EP Manufacturing Bhd will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.     Although there are no analyst estimates available for EP Manufacturing Bhd, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.   Is There Some Revenue Growth Forecasted For EP Manufacturing Bhd?   In order to justify its P/S ratio, EP Manufacturing Bhd would need to produce growth that's similar to the industry.   Retrospectively, the last year delivered an exceptional 70% gain to the company's top line.   Revenue has also lifted 22% in aggregate from three years ago, mostly thanks to the last 12 months of growth.  Therefore, it's fair to say the revenue growth recently has been respectable for the company.     Comparing the recent medium-term revenue trends against the industry's one-year growth forecast of 18% shows it's noticeably less attractive.  With this in mind, we find it intriguing that EP Manufacturing Bhd's P/S is comparable to that of its industry peers.  Apparently many investors in the company are less bearish than recent times would indicate and aren't willing to let go of their stock right now.  Maintaining these prices will be difficult to achieve as a continuation of recent revenue trends is likely to weigh down the shares eventually.    The Bottom Line On EP Manufacturing Bhd's P/S  While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.  We've established that EP Manufacturing Bhd's average P/S is a bit surprising since its recent three-year growth is lower than the wider industry forecast.  When we see weak revenue with slower than industry growth, we suspect the share price is at risk of declining, bringing the P/S back in line with expectations.  If recent medium-term revenue trends continue, the probability of a share price decline will become quite substantial, placing shareholders at risk.      We don't want to rain on the parade too much, but we did also find 3 warning signs for EP Manufacturing Bhd (1 is significant!) that you need to be mindful of.   If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios. Valuation is complex, but we're helping make it simple.Find out whether EP Manufacturing Bhd 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 EP Manufacturing Bhd (KLSE:EPMB) Is Taking Some Risk With Its Debt

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.'  When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin.  We can see that EP Manufacturing Bhd (KLSE:EPMB) does use debt in its business.  But is this debt a concern to shareholders?  Why Does Debt Bring Risk?  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 usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control.  Of course, plenty of companies use debt to fund growth, without any negative consequences.  The first thing to do when considering how much debt a business uses is to look at its cash and debt together.   Check out our latest analysis for EP Manufacturing Bhd  How Much Debt Does EP Manufacturing Bhd Carry?  As you can see below, at the end of December 2022, EP Manufacturing Bhd had RM177.5m of debt, up from RM167.7m a year ago. Click the image for more detail.    However, it does have RM63.7m in cash offsetting this, leading to net debt of about RM113.7m.  KLSE:EPMB Debt to Equity History April 27th 2023 How Strong Is EP Manufacturing Bhd's Balance Sheet?  According to the last reported balance sheet, EP Manufacturing Bhd had liabilities of RM284.4m due within 12 months, and liabilities of RM44.8m due beyond 12 months.   Offsetting these obligations, it had cash of RM63.7m as well as receivables valued at RM92.1m due within 12 months.   So its liabilities outweigh the sum of its cash and (near-term) receivables by RM173.4m.    When you consider that this deficiency exceeds the company's  RM136.6m market capitalization, you might well be inclined to review the balance sheet intently.  Hypothetically, extremely heavy dilution would be required if the company were forced to pay down its liabilities by raising capital at the current share price.    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).  This way, we consider both the absolute quantum of the debt, as well as the interest rates paid on it.   While EP Manufacturing Bhd's debt to EBITDA ratio (3.7) suggests that it uses some debt, its interest cover is very weak, at 0.60, suggesting high leverage.   It seems that the business incurs large depreciation and amortisation charges, so maybe its debt load is heavier than it would first appear, since EBITDA is arguably a generous measure of earnings.   It seems clear that the cost of borrowing money is negatively impacting returns for shareholders, of late.        The silver lining is that EP Manufacturing Bhd grew its EBIT by 1,358% last year, which nourishing like the idealism of youth.  If that earnings trend continues it will make its debt load much more manageable in the future.      When analysing debt levels, the balance sheet is the obvious place to start.  But it is EP Manufacturing Bhd's earnings that will influence how the balance sheet holds up in the future.  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.    Happily for any shareholders, EP Manufacturing Bhd actually produced more free cash flow than EBIT over the last two years.  That sort of strong cash generation warms our hearts like a puppy in a bumblebee suit.    Our View While EP Manufacturing Bhd's interest cover has us nervous.   To wit both its conversion of EBIT to free cash flow and EBIT growth rate were encouraging signs.        We think that EP Manufacturing Bhd's debt does make it a bit risky, after considering the aforementioned data points together.  That's not necessarily a bad thing, since leverage can boost returns on equity, but it is something to be aware of.    The balance sheet is clearly the area to focus on when you are analysing debt.  However, not all investment risk resides within the balance sheet - far from it.   For example, we've discovered 3 warning signs for EP Manufacturing Bhd (1 is significant!) that you should be aware of before investing here.     If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet. Valuation is complex, but we're helping make it simple.Find out whether EP Manufacturing Bhd 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.


Would Eversafe Rubber Berhad (KLSE:ESAFE) Be Better Off With Less Debt?

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.'  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.  We can see that Eversafe Rubber Berhad (KLSE:ESAFE) does use debt in its business.  But the more important question is: how much risk is that debt creating?  What Risk Does Debt Bring?  Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow.   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.  Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return.  The first thing to do when considering how much debt a business uses is to look at its cash and debt together.   View our latest analysis for Eversafe Rubber Berhad  How Much Debt Does Eversafe Rubber Berhad Carry?  You can click the graphic below for the historical numbers, but it shows that as of March 2023 Eversafe Rubber Berhad had RM48.7m of debt, an increase on RM40.4m, over one year.    However, it also had RM24.5m in cash, and so its net debt is RM24.2m.  KLSE:ESAFE Debt to Equity History July 17th 2023 How Strong Is Eversafe Rubber Berhad's Balance Sheet?  Zooming in on the latest balance sheet data, we can see that Eversafe Rubber Berhad had liabilities of RM44.9m due within 12 months and liabilities of RM24.0m due beyond that.    On the other hand, it had cash of RM24.5m and RM43.6m worth of receivables due within a year.   So these liquid assets roughly match the total liabilities.   This state of affairs indicates that Eversafe Rubber Berhad's balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets.  So while it's hard to imagine that the RM49.3m company is struggling for cash, we still think it's worth monitoring its balance sheet.     The balance sheet is clearly the area to focus on when you are analysing debt.  But you can't view debt in total isolation; since Eversafe Rubber Berhad will need earnings to service that debt.  So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.   Over 12 months, Eversafe Rubber Berhad reported revenue of RM142m, which is a gain of 16%, although it did not report any earnings before interest and tax.   That rate of growth is a bit slow for our taste, but it takes all types to make a world.    Caveat Emptor Importantly, Eversafe Rubber Berhad had an earnings before interest and tax (EBIT) loss over the last year.    Indeed, it lost RM700k at the EBIT level.    Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt.  Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time.   However, it doesn't help that it burned through RM4.1m of cash over the last year.   So in short it's a really risky stock.      When analysing debt levels, the balance sheet is the obvious place to start.  But ultimately, every company can contain risks that exist outside of the balance sheet.   To that end, you should learn about the   4 warning signs  we've spotted with Eversafe Rubber Berhad (including 2 which don't sit too well with us) .     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 Eversafe Rubber 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.


GIIB Holdings Berhad (KLSE:GIIB) Is Carrying A Fair Bit Of Debt

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says '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 GIIB Holdings Berhad (KLSE:GIIB) does have debt on its balance sheet.  But the more important question is: how much risk is that debt creating?  What Risk Does Debt Bring?  Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow.   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.  When we think about a company's use of debt, we first look at cash and debt together.   Check out our latest analysis for GIIB Holdings Berhad  How Much Debt Does GIIB Holdings Berhad Carry?  As you can see below, GIIB Holdings Berhad had RM9.42m of debt at March 2023, down from RM23.2m a year prior.    However, it also had RM4.22m in cash, and so its net debt is RM5.20m.  KLSE:GIIB Debt to Equity History June 19th 2023 How Strong Is GIIB Holdings Berhad's Balance Sheet?  The latest balance sheet data shows that GIIB Holdings Berhad had liabilities of RM50.6m due within a year, and liabilities of RM6.44m falling due after that.   Offsetting these obligations, it had cash of RM4.22m as well as receivables valued at RM13.7m due within 12 months.   So its liabilities outweigh the sum of its cash and (near-term) receivables by RM39.1m.    While this might seem like a lot, it is not so bad since GIIB Holdings Berhad has a  market capitalization of RM76.9m, and so it could probably strengthen its balance sheet by raising capital if it needed to.  But it's clear that we should definitely closely examine whether it can manage its debt without dilution.     There's no doubt that we learn most about debt from the balance sheet.  But you can't view debt in total isolation; since GIIB Holdings Berhad will need earnings to service that debt.  So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.   Over 12 months, GIIB Holdings Berhad reported revenue of RM39m, which is a gain of 11%, although it did not report any earnings before interest and tax.   That rate of growth is a bit slow for our taste, but it takes all types to make a world.    Caveat Emptor Over the last twelve months GIIB Holdings Berhad produced an earnings before interest and tax (EBIT) loss.    Its EBIT loss was a whopping RM12m.    Considering that alongside the liabilities mentioned above does not give us much confidence that company should be using so much debt.  So we think its balance sheet is a little strained, though not beyond repair.   For example, we would not want to see a repeat of last year's loss of RM10.0m.   So we do think this stock is quite 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 GIIB Holdings Berhad (2 make us uncomfortable!) that you should be aware of before investing here.     If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay. Valuation is complex, but we're helping make it simple.Find out whether GIIB 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.


GIIB Holdings Berhad Second Quarter 2023 Earnings: RM0.02 loss per share (vs RM0.01 loss in 2Q 2022)

GIIB Holdings Berhad (KLSE:GIIB) Second Quarter 2023 ResultsKey Financial Results Revenue: RM9.25m (down 11% from 2Q 2022). Net loss: RM12.0m (loss widened by 160% from 2Q 2022). RM0.02 loss per share (further deteriorated from RM0.01 loss in 2Q 2022).  KLSE:GIIB Earnings and Revenue History March 3rd 2023 All figures shown in the chart above are for the trailing 12 month (TTM) period GIIB Holdings Berhad's share price is broadly unchanged from a week ago.   Risk Analysis Before we wrap up, we've discovered 4 warning signs for GIIB Holdings Berhad (2 are significant!) that you should be aware of. Valuation is complex, but we're helping make it simple.Find out whether GIIB 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 Fair Value Of Kumpulan Jetson Berhad (KLSE:JETSON)

Key Insights Using the 2 Stage Free Cash Flow to Equity, Kumpulan Jetson Berhad fair value estimate is RM0.40   With RM0.33 share price, Kumpulan Jetson Berhad appears to be trading close to its estimated fair value   Kumpulan Jetson Berhad's peers are currently trading at a premium of 268% on average   In this article we are going to estimate the intrinsic value of Kumpulan Jetson Berhad (KLSE:JETSON) by projecting its future cash flows and then discounting them to today's value.  This will be done using the Discounted Cash Flow (DCF) model.  There's really not all that much to it, even though it might appear quite complex.  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 still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model.  Check out our latest analysis for Kumpulan Jetson Berhad  What's The Estimated Valuation?   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,  and so the sum of these future cash flows is then discounted to today's value:  10-year free cash flow (FCF) estimate  2024 2025 2026 2027 2028 2029 2030 2031 2032 2033  Levered FCF (MYR, Millions)  RM6.73m RM9.48m RM12.3m RM15.0m RM17.4m RM19.6m RM21.6m RM23.3m RM24.8m RM26.3m Growth Rate Estimate Source Est @ 56.96% Est @ 40.94% Est @ 29.73% Est @ 21.88% Est @ 16.39% Est @ 12.54% Est @ 9.85% Est @ 7.97% Est @ 6.65% Est @ 5.72%  Present Value (MYR, Millions) Discounted @ 17%  RM5.7 RM6.9 RM7.6 RM7.9 RM7.8 RM7.5 RM7.0 RM6.5 RM5.9 RM5.3 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM68m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period.  The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 3.6%. We discount the terminal cash flows to today's value at a cost of equity of 17%. Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = RM26m× (1 + 3.6%) ÷ (17%– 3.6%) = RM197mPresent Value of Terminal Value (PVTV)= TV / (1 + r)10= RM197m÷ ( 1 + 17%)10= RM40m The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value,  which in this case is RM108m.  In the final step we divide the equity value by the number of shares outstanding.  Compared to the current share price of RM0.3, the company appears   about fair value    at a 19% discount to where the stock price trades currently.   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:JETSON Discounted Cash Flow July 18th 2023  The Assumptions  We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows.  Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions.  The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance.  Given that we are looking at Kumpulan Jetson 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 17%, which is based on a levered beta of 1.719. 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.   Next Steps:  Although the valuation of a company is important, it  is only one of many factors that you need to assess for a company.  DCF models are not the be-all and end-all of investment valuation.  Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation.  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 Kumpulan Jetson Berhad, we've put together three  further  elements  you should consider:   Risks: You should be aware of the 3 warning signs for Kumpulan Jetson Berhad (2 are concerning!) we've uncovered before considering an investment in the company.   Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!  Other Environmentally-Friendly Companies: Concerned about the environment and think consumers will buy eco-friendly products more and more? Browse through our interactive list of companies that are thinking about a greener future to discover some stocks you may not have thought of!   PS. Simply Wall St updates its DCF calculation for every Malaysian stock every day, so if you want to find the intrinsic value of any other stock just search here.Valuation is complex, but we're helping make it simple.Find out whether Kumpulan Jetson 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 Kumpulan Jetson Berhad (KLSE:JETSON) Weighed On By Its Debt Load?

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously said that 'Volatility is far from synonymous with risk.'  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, Kumpulan Jetson Berhad (KLSE:JETSON) does carry debt.  But is this debt a concern to shareholders?  When Is Debt Dangerous?  Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow.   Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing.  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.  When we examine debt levels, we first consider both cash and debt levels, together.   Check out our latest analysis for Kumpulan Jetson Berhad  What Is Kumpulan Jetson Berhad's Net Debt?  You can click the graphic below for the historical numbers, but it shows that Kumpulan Jetson Berhad had RM51.8m of debt in March 2023, down from RM58.3m, one year before.    However, because it has a cash reserve of RM8.48m, its net debt is less, at about RM43.4m.  KLSE:JETSON Debt to Equity History June 1st 2023 A Look At Kumpulan Jetson Berhad's Liabilities  The latest balance sheet data shows that Kumpulan Jetson Berhad had liabilities of RM131.6m due within a year, and liabilities of RM34.4m falling due after that.   Offsetting this, it had RM8.48m in cash and RM75.1m in receivables that were due within 12 months.   So its liabilities outweigh the sum of its cash and (near-term) receivables by RM82.4m.    Given this deficit is actually higher than the company's  market capitalization of RM71.0m, we think shareholders really should watch Kumpulan Jetson Berhad's debt levels, like a parent watching their child ride a bike for the first time.  In the scenario where the company had to clean up its balance sheet quickly, it seems likely shareholders would suffer extensive dilution.     There's no doubt that we learn most about debt from the balance sheet.  But it is Kumpulan Jetson Berhad's earnings that will influence how the balance sheet holds up in the future.  So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.   In the last year Kumpulan Jetson Berhad wasn't profitable at an EBIT level, but managed to grow its revenue by 9.7%, to RM205m.   We usually like to see faster growth from unprofitable companies, but each to their own.    Caveat Emptor Over the last twelve months Kumpulan Jetson Berhad produced an earnings before interest and tax (EBIT) loss.    Indeed, it lost RM3.4m at the EBIT level.    Considering that alongside the liabilities mentioned above make us nervous about the company.  We'd want to see some strong near-term improvements before getting too interested in the stock.   For example, we would not want to see a repeat of last year's loss of RM9.0m.  In the meantime, we consider the stock to be risky.     The balance sheet is clearly the area to focus on when you are analysing debt.  However, not all investment risk resides within the balance sheet - far from it.      We've identified 2 warning signs  with Kumpulan Jetson Berhad (at least 1 which shouldn't be ignored)  , and understanding them should be part of your investment process.     Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today. Valuation is complex, but we're helping make it simple.Find out whether Kumpulan Jetson 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.


Kumpulan Jetson Berhad Third Quarter 2022 Earnings: RM0.002 loss per share (vs RM0.01 loss in 3Q 2021)

Kumpulan Jetson Berhad (KLSE:JETSON) Third Quarter 2022 ResultsKey Financial Results Revenue: RM54.2m (up 56% from 3Q 2021). Net loss: RM477.0k (loss narrowed by 79% from 3Q 2021). RM0.002 loss per share (improved from RM0.01 loss in 3Q 2021).  KLSE:JETSON Earnings and Revenue History November 27th 2022 All figures shown in the chart above are for the trailing 12 month (TTM) period Kumpulan Jetson Berhad shares are up 7.3% from a week ago.   Risk Analysis You still need to take note of risks, for example - Kumpulan Jetson Berhad has   4 warning signs  (and 1 which doesn't sit too well with us)  we think you should know about. Valuation is complex, but we're helping make it simple.Find out whether Kumpulan Jetson 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.