Here’s Why We Think QL Resources Berhad (KLSE:QL) Is Well Worth Watching
May 10, 2025
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss making companies can act like a sponge for capital – so investors should be cautious that they’re not throwing good money after bad.
So if this idea of high risk and high reward doesn’t suit, you might be more interested in profitable, growing companies, like QL Resources Berhad (KLSE:QL). While profit isn’t the sole metric that should be considered when investing, it’s worth recognising businesses that can consistently produce it.
The market is a voting machine in the short term, but a weighing machine in the long term, so you’d expect share price to follow earnings per share (EPS) outcomes eventually. That means EPS growth is considered a real positive by most successful long-term investors. It certainly is nice to see that QL Resources Berhad has managed to grow EPS by 21% per year over three years. As a general rule, we’d say that if a company can keep up that sort of growth, shareholders will be beaming.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it’s a great way for a company to maintain a competitive advantage in the market. While we note QL Resources Berhad achieved similar EBIT margins to last year, revenue grew by a solid 7.9% to RM7.0b. That’s encouraging news for the company!
The chart below shows how the company’s bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
Check out our latest analysis for QL Resources Berhad
You don’t drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for QL Resources Berhad’s future profits.
It’s a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. Shareholders will be pleased by the fact that insiders own QL Resources Berhad shares worth a considerable sum. We note that their impressive stake in the company is worth RM553m. This suggests that leadership will be very mindful of shareholders’ interests when making decisions!
It’s good to see that insiders are invested in the company, but are remuneration levels reasonable? Our quick analysis into CEO remuneration would seem to indicate they are. The median total compensation for CEOs of companies similar in size to QL Resources Berhad, with market caps between RM8.6b and RM28b, is around RM3.4m.
The QL Resources Berhad CEO received total compensation of only RM140k in the year to March 2024. You could consider this pay as somewhat symbolic, which suggests the CEO does not need a lot of compensation to stay motivated. While the level of CEO compensation shouldn’t be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of good governance, more generally.
For growth investors, QL Resources Berhad’s raw rate of earnings growth is a beacon in the night. If you need more convincing beyond that EPS growth rate, don’t forget about the reasonable remuneration and the high insider ownership. Everyone has their own preferences when it comes to investing but it definitely makes QL Resources Berhad look rather interesting indeed. Now, you could try to make up your mind on QL Resources Berhad by focusing on just these factors, or you could also consider how its price-to-earnings ratio compares to other companies in its industry.
Although QL Resources Berhad certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Malaysian companies that not only boast of strong growth but have strong insider backing.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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.
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