- GULF Achieves Global Standing with “A” Credit Rating and “Stable” Outlook from Japan Credit Rating Agency
Nov 14, 2025
Gulf Development Public Company Limited (GULF)
Reflecting Financial Strength and Growth Strategy
BANGKOK, Nov. 14, 2025 (GLOBE NEWSWIRE) -- GulfDevelopment Public Company Limited (GULF), Thailand’s leading conglomerate, has been assigned an “A” corporate credit rating with a “stable” outlook by Japan Credit Rating Agency (JCR). This rating is equivalent to Thailand’s sovereign credit rating, reflecting GULF’s strong business potential and solid financial position. Gulf Group has a diversified business structure covering energy, infrastructure, telecommunications, satellite, and digital sectors, which effectively generates stable cash flow and effectively diversifies revenue risks, particularly following the merger with Intouch Holdings Public Company Limited (INTUCH), a leading Thai investment company in the telecommunications, media, and digital sectors, most notably holding a controlling stake in AIS, Thailand’s largest mobile operator.
Mr. Sarath Ratanavadi, Chief Executive Officer of Gulf Development Public Company Limited (GULF), stated, “Receiving the ‘A’ corporate credit rating from JCR marks another significant milestone that reflects the confidence of investors and financial institutions in the potential and stability of the Gulf Group. This achievement will enhance our international credibility and increase opportunities to expand our foreign investor base, supporting the Company’s continuous growth and business expansion in the future.”
Japan Credit Rating Agency (JCR) is a leading credit rating agency in Japan, accredited by Japan’s Financial Services Agency (FSA). It is widely recognized in global financial markets and holds over 60% market share of domestic issuer ratings in Japan. Furthermore, JCR is the only Japanese credit rating institution registered in the United States, the European Union, and the United Kingdom, making its credit ratings broadly accepted internationally.
About GULF
Gulf Development Public Company Limited (GULF) is a leading conglomerate listed on the Stock Exchange of Thailand (SET), with a core focus on Energy, Large-Scale Infrastructure, Telecom and Satellites, and Digital businesses. Recognized for its prominence in power generation, GULF has successfully developed and managed a diverse portfolio of conventional and renewable energy projects across Thailand, Vietnam, Laos, Oman, Germany, the UK, and the USA.
Following the strategic amalgamation with INTUCH in April 2025, GULF significantly expanded its scope into the Digital and Telecommunications sector, including its ventures into data centers and digital businesses. GULF continues to leverage its extensive expertise and operational excellence to ensure resource reliability, promote safe energy transition, underscoring its commitment towards sustainable development and environmental stewardship.
Story Continues
GULF is committed to the global energy transition with ambitious targets for decarbonization. The company aims to achieve a 25% reduction in Scope 1 carbon intensity by 2030 and is committed to reaching Net Zero for Scope 1 and Scope 2 Greenhouse Gas (GHG) emissions by 2050. Furthermore, GULF maintains a ‘No Coal Policy’ and is increasing the proportion of renewable energy within the company’s portfolio to 40% of total electricity generation capacity 2035
For more information about GULF, please visit the company’s website: https://www.gulf.co.th/en/home
Investor Resource Center: https://investor.gulf.co.th/en/resource-centerNew_GULF-LOGO-FINAL
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/3cbabf4f-d89b-41b6-a8a5-caf2f69d68a5
CONTACT: Contact: nalinuth.si@gulf.co.th
View Comments
- Telcos Advanced Info, Thaicom want investors to reject offers under parent merger
Jan 16, 2025
(Reuters) -The boards of Thai mobile carriers Advanced Info Service and Thaicom have asked shareholders to reject offers to acquire both the firms.
In July 2024, power producer Gulf Energy Development, the largest shareholder of Thaicom, and Intouch Holdings, which controls Advanced, announced their intent to merge to create a new company for maximizing benefits for both the firms and improving operations and investments.
A merger of Gulf and Intouch, already approved by shareholders of Thai billionaire Sarath Ratanavadi's power company, would create a new entity valued at 1.037 trillion baht ($30 billion).
Sarath has a net worth of $15.1 billion according to Forbes and is the country's fifth richest person.
Gulf owns about 47.4% stake in Intouch, followed by Singapore Telecommunication (Singtel) which has an around 25% interest.
Gulf has a joint venture with Singtel and Advanced to set up data centres locally and is expected to begin operations this year.
A tender offer was launched for Advanced, by Gulf Energy, Intouch and Singtel, valuing the firm at 216.30 baht per share, with the offer later being lowered to 211.43 baht.
Advanced said its financial adviser found the revised price to be lower than its estimated valuation range of 229.55 baht to 285.70 baht.
Shares of Advanced closed 1.1% higher at 290 baht apiece on Thursday.
Wattana Punyawattanakul, an equity analyst at TISCO Investment Advisory had expected in July last year that Advanced would emerge as the clear beneficiary from the proposed merger, with investors likely to shift to the company from Intouch.
As part of the restructuring, a similar tender offer was launched, under which, Gulf Energy, Intouch and Sarath offered to buy 58.9% of Thaicom at 11 baht apiece.
Thaicom said its rising stock price since the merger announcement is the primary reason it is asking shareholders to vote against the deal.
Its shares ended flat at 12.3 baht on Thursday.
Gulf Energy, Intouch and Singtel did not immediately respond to a Reuters request for comment.
($1 = 34.5700 baht)
($1 = 1.3671 Singapore dollars)
(Reporting by Rishav Chatterjee in Bengaluru; Editing by Mrigank Dhaniwala and David Evans)
View Comments
- Gulf Energy Investors Approve $30 Billion Energy, Telco Deal
Oct 3, 2024
(Bloomberg) -- Shareholders of Thai billionaire Sarath Ratanavadi’s power company Gulf Energy Development Pcl approved on Thursday a planned merger with its telecoms affiliate Intouch Holdings Pcl, paving the way for the almost $30 billion transaction to get done.
Most Read from Bloomberg
The Corner Store Comeback A Housing Crisis Brews in Rwanda’s Capital City Gang Violence Is Moving to the Amazon’s Fast-Growing Cities A 7,000-Year-Old City Emerges as a Haven from Dubai’s Sky-High Rents Roofs of Mexico City’s Massive Food Market Will Power Public Buses
Gulf Energy’s stock is set to rise the most in two weeks after almost all shareholders approved the merger, giving the company a market value of $20 billion. Intouch’s shares are headed for biggest gain in nearly a month, valuing the firm at $9.2 billion.
A combination of the companies will accelerate business and earnings growth of the newly-created entity, Gulf Energy CEO Sarath said at a shareholders meeting in Bangkok.
“The almost unanimous vote of Gulf Energy shareholders offered a much more positive outlook,” Sarath told reporters. “I am willing to buy out all shares of dissenting shareholders who vote against it.”
Only a few minutes before the vote result, Sarath had said that he still didn’t rule out withdrawing a proposed purchase of shares from dissenting shareholders of Gulf Energy and Intouch if they voted overwhelmingly against the deal.
Sarath had been leaning against buying out minority investors who may oppose the combination of the two firms, Bloomberg News had reported earlier. Such a move could have represented a major hurdle for the deal, people familiar with the matter had said.
Sarath, who along with his family control a roughly 74% stake in Gulf Energy, would need to buy out those minority investors to be able to complete the deal. Under the country’s law, more than three quarters of shareholders in the meeting need to approve the deal and the biggest shareholder needs to purchase the shares from those dissented investors.
Sarath is Thailand’s richest person with a net worth of $15.3 billion, according to the Bloomberg Billionaires Index.
Gulf Energy in July said it plans to combine with its telecom unit Intouch to simplify the group’s shareholding structure and maximize benefits for future operations and investments. A key condition for the deal to go through is that Sarath buys out those minority shareholders who vote against the merger at the market prices on Wednesday.
As part of the agreement, the billionaire has a right to withdraw from acquiring shares of Gulf Energy from dissented investors if the share price on Oct. 2 is higher than 45 baht. The shares closed at 56.50 baht on Wednesday, 26% above Sarath’s stated ceiling. For Intouch, Sarath has an option to cancel the offering if the company’s stock price is above 76 baht. The stock closed at 91 baht close on Wednesday.
Story continues
--With assistance from Thomas Kutty Abraham, Anuchit Nguyen and Fion Li.
(Updates with vote from Gulf Energy meeting from first paragraph)
Most Read from Bloomberg Businessweek
Adam Neumann’s Latest Project Is a WeWork Competitor The Great €3 Billion Shipping Container Heist Elon Musk’s Role in Reanimating the Far-Right Term ‘Remigration’ How a Short Seller’s Attack Threatens This Spanish Family Company Sports Betting Apps Are Even More Toxic Than You Thought
©2024 Bloomberg L.P.
View comments
- Thai Billionaire Sarath to Merge Energy, Telecom Businesses
Jul 16, 2024
(Bloomberg) -- Thai billionaire Sarath Ratanavadi unveiled a plan to consolidate his energy and telecom businesses by merging his listed power company with the owner of the nation’s most-valuable mobile phone operator.
Most Read from Bloomberg
BlackRock Says Gunman From Trump Rally Appeared in Firm’s Ad Amazon Sold a Used Diaper. It Tanked a Mom-and-Pop Business Trump Shooting Changes Biden’s Plan to Revive 2024 Campaign From Elon Musk to David Sacks, Silicon Valley’s Trump Backers Cheer Vance as VP Pick Xi Jinping’s Great Economic Rewiring Is Cushioning China’s Slowdown
Gulf Energy Development Pcl will merge with its telecom unit Intouch Holdings Pcl, the companies announced in separate statements. Existing shareholders of Gulf Energy will receive 1.02974 shares of the merged entity, while Intouch holders will get 1.69335 shares for every stock held, the companies said. Gulf owns about 47.4% stake in Intouch.
The combined market value of the two companies was $20.5 billion at Tuesday’s closing price in Bangkok.
Sarath, ranked as the second-richest Thai with a net worth of $9.8 billion, is restructuring his businesses focused on everything from renewable energy to telecom and data centers just three years after gaining control of Intouch. The revamp will allow the group to maximize benefits for future operations and investments, simplify shareholding structure and cultivate new growth opportunities in the energy and infrastructure and digital landscape, Gulf Energy said.
“The combined expertise will benefit both companies and all stakeholders, increasing the potential of the new company to be a leader in the energy and telecommunications business,” Sarath said in the statement. The company will expand its energy portfolio into the renewable sector and also focus on significant digital expansion as announced from time to time, he said.
Singtel Support
Gulf Energy, Intouch and Singtel Strategic Investments Pte. and Sarath will make a tender offer for 36.25% of mobile carrier Advanced Info Service Pcl at 216.30 baht a share each. The offer price is below Advanced Info’s closing price of 220 baht on Tuesday.
Singapore Telecommunications Ltd. said in an exchange filing that it supported the amalgamation between Gulf Energy and Intouch. The restructuring will simplify Singtel’s shareholding in its Thai associate Advanced Info by removing Intouch as the intermediary holding company, it said. Currently, Singtel holds 24.99% in Intouch while Intouch holds 40.44% in Advanced Info, it said.
Singtel is set to get about 9% stake in the new company and the company will also book a gain of S$400 from the amalgamation, it said.
Story continues
As part of the restructuring, Gulf Energy, Intouch and Sarath will also offer to buy 58.9% of Thaicom Pcl, a satellite operator at 11 baht apiece.
The board of directors of Intouch also gave an in-principle approval for a special dividend payout of 4.5 baht per share from its retained earnings, the company said.
The restructuring is expected to be completed in the second quarter of next year subject to all regulatory approvals. Bualuang Securities and UBS AG were advisers to Gulf Energy on the transaction.
(Updates with details throughout.)
Most Read from Bloomberg Businessweek
How Rivian Became the Anti-Tesla Here’s How to Create a Social Safety Net With Bipartisan Support Looser Visa Rules for Indian Travelers Stoke a Tourism Boom Ukraine Is Fighting Russia With Toy Drones and Duct-Taped Bombs Asia Is The New Hot Destination for Luxury Travel
©2024 Bloomberg L.P.
View comments
- Intouch Holdings PCL's Dividend Analysis
Feb 19, 2024
Assessing the Sustainability of Intouch Holdings PCL's Upcoming Dividend
Intouch Holdings PCL (SHNUF) recently announced a dividend of $1.7 per share, payable on 2024-04-19, with the ex-dividend date set for 2024-02-20. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Intouch Holdings PCL's dividend performance and assess its sustainability.
What Does Intouch Holdings PCL Do?
Warning! GuruFocus has detected 5 Warning Signs with CMSQY. High Yield Dividend Stocks in Gurus' Portfolio This Powerful Chart Made Peter Lynch 29% A Year For 13 Years How to calculate the intrinsic value of a stock?
Intouch Holdings PCL is an investment holding company, which predominantly invests money in telecommunications, media, and technology. The company generates the vast majority of its revenue in Thailand. It operates through two main business segments: wireless telecommunications and satellite & international businesses. The company's wireless telecommunications business is composed of Info Service and is the majority of overall revenue. Info Service is a triple-play telecommunications provider. The company generates revenue from the provision of mobile phone services, mobile handset sales, and broadband services. Intouch's satellite and the international business segment is a holding in Thaicom, which is a satellite operator, which generates revenue from providing satellite services. Intouch Holdings PCL's Dividend Analysis
A Glimpse at Intouch Holdings PCL's Dividend History
Intouch Holdings PCL has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Intouch Holdings PCL's Dividend Yield and Growth
As of today, Intouch Holdings PCL currently has a 12-month trailing dividend yield of 4.33% and a 12-month forward dividend yield of 4.78%. This suggests an expectation of increased dividend payments over the next 12 months.
Story continues
Over the past three years, Intouch Holdings PCL's annual dividend growth rate was 7.30%. Extended to a five-year horizon, this rate decreased to 3.80% per year. And over the past decade, Intouch Holdings PCL's annual dividends per share growth rate stands at -5.20%.
Based on Intouch Holdings PCL's dividend yield and five-year growth rate, the 5-year yield on cost of Intouch Holdings PCL stock as of today is approximately 5.22%. Intouch Holdings PCL's Dividend Analysis
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Intouch Holdings PCL's dividend payout ratio is 0.74, which may suggest that the company's dividend may not be sustainable.
Intouch Holdings PCL's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Intouch Holdings PCL's profitability 4 out of 10 as of 2023-12-31, suggesting the dividend may not be sustainable. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Intouch Holdings PCL's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Intouch Holdings PCL's earnings increased by approximately 7.90% per year on average, a rate that outperforms approximately 55.02% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -0.40%, which outperforms approximately 32.52% of global competitors.
Next Steps
When considering Intouch Holdings PCL's dividend payments, investors should weigh the company's consistent dividend history against the current payout ratio and profitability rank. While the growth metrics present a mixed picture, the solid earnings performance may provide some reassurance. However, the sustainability of Intouch Holdings PCL's dividends will largely depend on future earnings and growth potential. Investors should continue to monitor these factors closely, assessing whether Intouch Holdings PCL can maintain its dividend commitments while pursuing strategic growth opportunities. As always, due diligence is key when evaluating any investment decision. For those seeking high-dividend yield stocks, GuruFocus Premium users can screen for attractive options using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
- Intouch Insight Ltd.'s (CVE:INX) Stock On An Uptrend: Could Fundamentals Be Driving The Momentum?
Jan 29, 2024
Intouch Insight's (CVE:INX) stock is up by a considerable 19% over the past three months. As most would know, fundamentals are what usually guide market price movements over the long-term, so we decided to look at the company's key financial indicators today to determine if they have any role to play in the recent price movement. In this article, we decided to focus on Intouch Insight's ROE.
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.
Check out our latest analysis for Intouch Insight
How Do You Calculate Return On Equity?
The formula for ROE is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Intouch Insight is:
3.1% = CA$214k ÷ CA$6.9m (Based on the trailing twelve months to September 2023).
The 'return' refers to a company's earnings over the last year. One way to conceptualize this is that for each CA$1 of shareholders' capital it has, the company made CA$0.03 in profit.
What Is The Relationship Between ROE And Earnings Growth?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.
A Side By Side comparison of Intouch Insight's Earnings Growth And 3.1% ROE
As you can see, Intouch Insight's ROE looks pretty weak. Even when compared to the industry average of 15%, the ROE figure is pretty disappointing. Despite this, surprisingly, Intouch Insight saw an exceptional 76% net income growth over the past five years. We reckon that there could be other factors at play here. For instance, the company has a low payout ratio or is being managed efficiently.
Story continues
As a next step, we compared Intouch Insight's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 8.2%. past-earnings-growth
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is Intouch Insight fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Intouch Insight Making Efficient Use Of Its Profits?
Intouch Insight doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the high earnings growth number that we discussed above.
Conclusion
In total, it does look like Intouch Insight has some positive aspects to its business. With a high rate of reinvestment, albeit at a low ROE, the company has managed to see a considerable growth in its earnings. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. To know the 3 risks we have identified for Intouch Insight visit our risks dashboard for free.
Have 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.
- Do Its Financials Have Any Role To Play In Driving Intouch Insight Ltd.'s (CVE:INX) Stock Up Recently?
Aug 21, 2023
Most readers would already be aware that Intouch Insight's (CVE:INX) stock increased significantly by 13% over the past month. As most would know, fundamentals are what usually guide market price movements over the long-term, so we decided to look at the company's key financial indicators today to determine if they have any role to play in the recent price movement. Particularly, we will be paying attention to Intouch Insight's ROE today.
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
See our latest analysis for Intouch Insight
How Do You Calculate Return On Equity?
ROE can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Intouch Insight is:
6.0% = CA$405k ÷ CA$6.7m (Based on the trailing twelve months to June 2023).
The 'return' is the income the business earned over the last year. So, this means that for every CA$1 of its shareholder's investments, the company generates a profit of CA$0.06.
Why Is ROE Important For Earnings Growth?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.
Intouch Insight's Earnings Growth And 6.0% ROE
When you first look at it, Intouch Insight's ROE doesn't look that attractive. We then compared the company's ROE to the broader industry and were disappointed to see that the ROE is lower than the industry average of 13%. However, we we're pleasantly surprised to see that Intouch Insight grew its net income at a significant rate of 74% in the last five years. Therefore, there could be other reasons behind this growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.
Story continues
Next, on comparing with the industry net income growth, we found that Intouch Insight's growth is quite high when compared to the industry average growth of 9.1% in the same period, which is great to see. past-earnings-growth
Earnings growth is an important metric to consider when valuing a stock. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Intouch Insight is trading on a high P/E or a low P/E, relative to its industry.
Is Intouch Insight Using Its Retained Earnings Effectively?
Given that Intouch Insight doesn't pay any dividend to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business.
Conclusion
In total, it does look like Intouch Insight has some positive aspects to its business. Despite its low rate of return, the fact that the company reinvests a very high portion of its profits into its business, no doubt contributed to its high earnings growth. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. Our risks dashboard would have the 3 risks we have identified for Intouch Insight.
Have 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.
- Intouch Insight Full Year 2022 Earnings: EPS: CA$0.024 (vs CA$0.013 loss in FY 2021)
Apr 8, 2023
Intouch Insight (CVE:INX) Full Year 2022 Results
Key Financial Results
Revenue: CA$23.5m (up 47% from FY 2021). Net income: CA$609.9k (up from CA$315.4k loss in FY 2021). Profit margin: 2.6% (up from net loss in FY 2021). EPS: CA$0.024 (up from CA$0.013 loss in FY 2021). earnings-and-revenue-history
All figures shown in the chart above are for the trailing 12 month (TTM) period
Intouch Insight shares are down 5.8% from a week ago.
Risk Analysis
It's necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Intouch Insight (at least 1 which is a bit unpleasant), and understanding these should be part of your investment process.
Have 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
- Intouch Insight Ltd.'s (CVE:INX) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?
Mar 14, 2023
Intouch Insight (CVE:INX) has had a rough month with its share price down 8.3%. But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals. In this article, we decided to focus on Intouch Insight's ROE.
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
View our latest analysis for Intouch Insight
How Is ROE Calculated?
Return on equity can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Intouch Insight is:
9.4% = CA$615k ÷ CA$6.6m (Based on the trailing twelve months to September 2022).
The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every CA$1 worth of equity, the company was able to earn CA$0.09 in profit.
What Is The Relationship Between ROE And Earnings Growth?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don’t share these attributes.
Intouch Insight's Earnings Growth And 9.4% ROE
At first glance, Intouch Insight's ROE doesn't look very promising. However, given that the company's ROE is similar to the average industry ROE of 9.3%, we may spare it some thought. Particularly, the exceptional 49% net income growth seen by Intouch Insight over the past five years is pretty remarkable. Given the slightly low ROE, it is likely that there could be some other aspects that are driving this growth. Such as - high earnings retention or an efficient management in place.
Story continues
Next, on comparing with the industry net income growth, we found that Intouch Insight's growth is quite high when compared to the industry average growth of 13% in the same period, which is great to see. past-earnings-growth
Earnings growth is a huge factor in stock valuation. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). Doing so will help them establish if the stock's future looks promising or ominous. Is Intouch Insight fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Intouch Insight Making Efficient Use Of Its Profits?
Intouch Insight doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the high earnings growth number that we discussed above.
Conclusion
Overall, we feel that Intouch Insight certainly does have some positive factors to consider. With a high rate of reinvestment, albeit at a low ROE, the company has managed to see a considerable growth in its earnings. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. Our risks dashboard would have the 2 risks we have identified for Intouch Insight.
Have 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
- Intouch Insight Ltd.'s (CVE:INX) Stock Has Shown Weakness Lately But Financial Prospects Look Decent: Is The Market Wrong?
Oct 5, 2022
Intouch Insight (CVE:INX) has had a rough three months with its share price down 16%. However, stock prices are usually driven by a company’s financials over the long term, which in this case look pretty respectable. Specifically, we decided to study Intouch Insight's ROE in this article.
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. Put another way, it reveals the company's success at turning shareholder investments into profits.
View our latest analysis for Intouch Insight
How Is ROE Calculated?
Return on equity can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Intouch Insight is:
3.1% = CA$192k ÷ CA$6.2m (Based on the trailing twelve months to June 2022).
The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every CA$1 worth of equity, the company was able to earn CA$0.03 in profit.
What Is The Relationship Between ROE And Earnings Growth?
So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.
Intouch Insight's Earnings Growth And 3.1% ROE
It is quite clear that Intouch Insight's ROE is rather low. Not just that, even compared to the industry average of 6.7%, the company's ROE is entirely unremarkable. However, we we're pleasantly surprised to see that Intouch Insight grew its net income at a significant rate of 38% in the last five years. We believe that there might be other aspects that are positively influencing the company's earnings growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.
Story continues
We then performed a comparison between Intouch Insight's net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 42% in the same period. past-earnings-growth
Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. Is Intouch Insight fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Intouch Insight Making Efficient Use Of Its Profits?
Intouch Insight doesn't pay any dividend to its shareholders, meaning that the company has been reinvesting all of its profits into the business. This is likely what's driving the high earnings growth number discussed above.
Summary
Overall, we feel that Intouch Insight certainly does have some positive factors to consider. Despite its low rate of return, the fact that the company reinvests a very high portion of its profits into its business, no doubt contributed to its high earnings growth. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. Our risks dashboard would have the 4 risks we have identified for Intouch Insight.
Have 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
