MYEG HISTORICAL PERFORMANCE FY   REV   NP   NPM(%) 2017  372   202   54.2 2018  319   170   53.4 2018  246 -41.4  -16.8 2019  357   175    49 2019  239   130    54.3 2020  532   268    50.4 2021  724   316    43.6 2022  651   399    61.2 2023  774   488    63 2024(3Q)  723   516   71.4 Revenues and Net Profits are in RM millions ..read more

Every business goes through the S-curve cycle of growth:  infancy (low growth),  expansion (rapid growth) and  maturity (slow growth). No matter how successful the product is, growth must slow at some point (maturity phase), due to a number of reasons: increased competition,  market saturation,  technology disruption,  regulatory changes and  changing consumer preferences. VALUE CREATION OR DESTRUCTION:  MANAGEMENT'S ROLE Ultimately, whether a company remains VALUE CREATIVE OR DESTRUSTIVE, depends on how well management understand this inevitab ..read more

Savvy investors know about the corporate life cycle:  start-up,  rapid growth phase,  mature growth phase,  stagnation or outright decline. Companies in their startup phase lose money. If they're successful, though, they enter a rapid growth period, where sales - and eventually profits - shoot upward. Then, alas, comes the point when the company has exhausted all of the easy growth opportunities. The low-hanging fruit has been picked. The company enters a mature phase in which sales maybe growing, but at a much slower rate than before. Finally, in a company's do ..read more

You have to invest. Inflation is the enemy of your cash. Compounding is the friend of your cash. You do not have a choice but to invest for the long term. The purchasing power of your cash continues to be eroded by inflation. You have no choice but to be educated on investing. Either you invest on your own or you invest through a fund, you will still require an education on investing, to be able to do so intelligently on your own or even to know how to use or work with your fund managers. The earlier you obtain this education, the better.  Sadly, the schools during my time, and perhaps ev ..read more

The most popular valuation metrics are  Price/Earnings,  Price/Ebidta,  Price/Sales,  Price/Book value and  EV/Ebitda. (EV or Enterprise Value = Market cap + Debt). Many different methods as listed above are used to arrive at the valuation for stocks.  However, remember that there is ever only one definition for valuation: the discounted cash flow.  All the above metrics are merely short forms or shortcuts for discounted cash flow.  These metrics are widely used because they are easier to compute and understand, and can be compared across companie ..read more

Companies that are trading at negative enterprise value (EV) EV = market value of common stock + market value of preferred equity + market value of debt + minority interest - cash and investments. Why is the market having a very negative perception of the company's future prospects (rightly or wrongly), governance and/or believe the cash is not real? Some of these companies are simply too small, and not tradeable.   Some are shell companies waiting for a corporate exercise. There are many reasons: Fake bank statements It is very hard to fake bank statements and accordingly, net cash ..read more

Often, companies trade at discounts to their net cash and more broadly, the value of their underlying assets, because of the "time to monetisation" factor. Investors are generally not patient enough to wait for asset value to crystallise.   An example: Many property companies are currently trading below their book values, not for any of the ominous reasons, but simply because they are land-banking.  The land is valuable but it takes many years to be developed and translated into earnings, cash flows and returns to shareholders. In these cases, opportunity arises when the compan ..read more

 If you are thinking of investing in the shares of airline, rail or retail companies, and many others, you need to understand of the biggest risks that you will face as a shareholder - hidden debts. By understanding what hidden debts are and how to analyse companies that have them, you will make better investment decisions and take on less risk. Retail company with big future rent commitments Where a company has big future rent commitments, there are 2 useful things you can do: 1.  Calculate a company's fixed charge cover. 2.  Calculate the capitalised value of operating lease ..read more

Look out for companies that report consistent profits but also a substantial rise in gearing, which would indicate negative FCF.   Receivables and/or inventories rise even faster than increasing sales This is usually the case when companies report increasing sales but where receivables and/or inventories rise even faster. If a company's receivables grow at a much faster rate than revenue, it will suffer net cash outflows, which have to be funded with increasing debt (or cash calls).  It can continue to report steady profits for many years - even as the company is being crushed ..read more

These metrics rely  on reported profits or earnings rather than cash flows: P/E P/EBITDA P/S P/BV EV/EBITDA Profits may not reflect the actual underlying cash flows. Some examples: 1.  Interest paid on perpetual securities (perps)   These are not considered interest expense, thereby inflating profits.   At the same time, accounting for perps as equity also understates the company's actual gearing. 2.  Companies can capitalise interest expense as assets in certain circumstances Interests during construction of assets or when property developers borrow to p ..read more