The market for Pentamaster International Limited's (HKG:1665) stock was strong after it released a healthy earnings report last week. However, we think that shareholders should be cautious as we found some worrying factors underlying the profit.
Check out our latest analysis for Pentamaster International
SEHK:1665 Earnings and Revenue History August 18th 2022
Examining Cashflow Against Pentamaster International's Earnings
Many investors haven't heard of the accrual ratio from cashflow, but it is actually a useful measure of how well a company's profit is backed up by free cash flow (FCF) during a given period. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. This ratio tells us how much of a company's profit is not backed by free cashflow.
Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth.
Pentamaster International has an accrual ratio of 0.33 for the year to June 2022. We can therefore deduce that its free cash flow fell well short of covering its statutory profit, suggesting we might want to think twice before putting a lot of weight on the latter. To wit, it produced free cash flow of RM26m during the period, falling well short of its reported profit of RM125.3m. Pentamaster International's free cash flow actually declined over the last year, but it may bounce back next year, since free cash flow is often more volatile than accounting profits.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On Pentamaster International's Profit Performance
As we discussed above, we think Pentamaster International's earnings were not supported by free cash flow, which might concern some investors. As a result, we think it may well be the case that Pentamaster International's underlying earnings power is lower than its statutory profit. Nonetheless, it's still worth noting that its earnings per share have grown at 7.4% over the last three years. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Pentamaster International, and understanding it should be part of your investment process.
This note has only looked at a single factor that sheds light on the nature of Pentamaster International's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.
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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.
中國的市場五角星國際有限公司(HKG:1665)上週發佈健康的收益報告後,股票表現強勁。然而,我們認為股東應該謹慎,因為我們發現了一些令人擔憂的利潤背後的因素。
請查看我們對五角星國際的最新分析
聯交所:1665盈利及收入歷史2022年8月18日
檢查現金流與五角星國際公司的收益
許多投資者都沒有聽説過現金流應計比率但它實際上是衡量一家公司在給定時期內自由現金流(FCF)支持公司利潤的程度的有用指標。為了得到應計比率,我們首先從一個時期的利潤中減去FCF,然後用這個數字除以該時期的平均運營資產。這個比率告訴我們,一家公司的利潤中有多少不是由自由現金流支持的。
因此,當一家公司的應計比率為負時,它實際上被認為是一件好事,但如果它的應計比率為正,那就是一件壞事。這並不意味着我們應該擔心應計比率為正,但值得注意的是,在應計比率相當高的地方。這是因為一些學術研究表明,高應計制比率往往會導致較低的利潤或較低的利潤增長。
五角星國際在截至2022年6月的一年中的應計比率為0.33。因此,我們可以推斷,它的自由現金流遠遠低於其法定利潤,這表明我們在加大對後者的重視之前,可能需要三思而後行。換言之,該公司在此期間產生了2600萬林吉特的自由現金流,遠低於其公佈的1.253億林吉特的利潤。五角星國際的自由現金流實際上在去年有所下降,但明年可能會反彈,因為自由現金流的波動性往往比會計利潤更大。
這可能會讓你想知道,分析師對未來盈利能力的預測是什麼。幸運的是,您可以單擊此處查看基於他們估計的未來盈利能力的互動圖表。
我們對五角星國際公司利潤表現的看法
正如我們上面討論的,我們認為五角星國際的收益沒有得到自由現金流的支持,這可能會讓一些投資者感到擔憂。因此,我們認為情況很可能是五菱國際的潛在盈利能力低於其法定利潤。儘管如此,值得注意的是,它的每股收益在過去三年裏增長了7.4%。當然,當談到分析其收益時,我們只是觸及了皮毛;人們還可以考慮利潤率、預測增長和投資回報等因素。因此,如果你想更深入地研究這隻股票,考慮它面臨的任何風險是至關重要的。在投資風險方面,我們已經確定了1個警告信號與五角星國際公司合作,並理解這應該是您投資過程的一部分。
這份報告只關注了一個因素,它揭示了五角大樓國際公司的利潤性質。但如果你有能力將注意力集中在細枝末節上,總會有更多的東西需要發現。一些人認為,高股本回報率是高質量企業的良好標誌。所以你可能想看看這個免費擁有高股本回報率的公司的集合,或內部人士正在購買的這份股票清單。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。