Coastal Contracts Bhd

Coastal Contracts Bhd maintains a strong liquidity position, with a current ratio of 5.74, indicating the company can cover short-term obligations more than five times over. However, the company reported negative operating cash flow of MYR -14.9 million in the latest period, which contrasts with a positive free cash flow of MYR 105.7 million, suggesting capital management is skewed toward non-operational sources. The debt-to-equity ratio of 0.03 reflects a conservative capital structure, with long-term debt at MYR 49.1 million compared to total equity of MYR 1.86 billion.

Profitability metrics show Coastal Contracts Bhd is generating a return on equity of 5.09% and a return on assets of 4.4%, both of which are positive but modest. These figures suggest the company is earning a return on its equity and asset base, though the returns are not significantly outperforming the industry median for shipbuilders. The operating income of MYR 74.8 million and net income of MYR 94.9 million indicate a healthy margin, but gross profit of MYR 48.9 million suggests that cost control may be a challenge in the industry.

The company's revenue is concentrated in a single business segment, with no disclosed geographic diversification. This lack of diversification increases exposure to regional economic shifts and regulatory changes, particularly in the maritime industry. The absence of segment or geographic breakdown in the financial data limits the ability to assess risk distribution across different markets or product lines.

Growth trajectory appears mixed. While the company reported a net income of MYR 94.9 million, the operating cash flow was negative, which may signal short-term operational inefficiencies or capital outflows. Analysts have assigned a mean price target of MYR 1.97, with a single "buy" recommendation and no "strong buy" or "hold" ratings, suggesting limited near-term upside potential. The capital expenditure of MYR -48,000 indicates minimal investment in new projects, which could limit long-term growth unless offset by organic expansion or market capture.

Risk factors include liquidity concerns, as the company's net cash is negative after subtracting total debt. This could constrain its ability to fund operations or pursue strategic opportunities without external financing. The risk assessment also flags dilution as low, with no immediate pressure from share issuance or dilution events. However, the negative operating cash flow and reliance on free cash flow for liquidity could become problematic if the company faces a downturn in demand or rising input costs.

Recent events include the latest financial filing, which shows a strong equity position and low leverage. No recent earnings call transcripts or material events were disclosed in the available data. The company's capital structure and financial performance suggest it is in a stable but not rapidly growing phase, with a focus on maintaining liquidity and managing debt.

Analysts project 55.1% upside to a consensus target price of MYR 1.97, signaling strong market confidence in future performance.

Operating and net margins are best-in-class within the shipbuilding cohort, significantly outperforming the median peers.

The company maintains a low debt-to-equity ratio of 0.03, indicating a conservative capital structure with minimal leverage risk.

Year-over-year revenue growth of 44.0% demonstrates strong top-line expansion momentum compared to the prior period.

Dilution and credit risks are assessed as low, suggesting a stable shareholder base and manageable default probabilities.

The latest fiscal year recorded a net loss of MYR 48.1 million, indicating a severe deterioration in profitability.

Free cash flow turned negative at MYR 67.2 million in the latest period, raising concerns about liquidity generation.

Cash conversion is in the bottom quartile of the cohort, reflecting poor efficiency in turning earnings into cash.

Return on equity of 5.09% falls below the shipbuilding cohort median, suggesting suboptimal capital efficiency.

A four-year revenue CAGR of -8.6% highlights a long-term declining trend in top-line growth potential.

Revenue MYR 56.1M, −27,9% YoY; Operating income −218,0% YoY.

• ▍Revenue MYR 56.1M, −27,9% YoY
• ▍Operating income −218,0% YoY
• ▍Net income −129,5% YoY
• ▍Free cash flow −133,9% YoY
• ▍Net margin -85.8%

Revenue MYR 77.8M, −76,7% YoY; Operating income −60,4% YoY.

• ▍Revenue MYR 77.8M, −76,7% YoY
• ▍Operating income −60,4% YoY
• ▍Net income −50,1% YoY
• ▍Net margin 209.6%

Revenue MYR 333.6M, +43,4% YoY; Operating income +68,0% YoY.

• ▍Revenue MYR 333.6M, +43,4% YoY
• ▍Operating income +68,0% YoY
• ▍Net income +81,3% YoY
• ▍Net margin 97.9%