There May Be Underlying Issues With The Quality Of Addvalue Technologies' (SGX:A31) Earnings

Simply Wall St.

May 29

Addvalue Technologies Ltd's (SGX:A31) stock was strong after they recently reported robust earnings. We did some analysis and think that investors are missing some details hidden beneath the profit ...

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We did some analysis and think that investors are missing some details hidden beneath the profit ...</p>\n\n<a href=\"https://simplywall.st/stocks/sg/tech/sgx-a31/addvalue-technologies-shares/news/there-may-be-underlying-issues-with-the-quality-of-addvalue\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>There May Be Underlying Issues With The Quality Of Addvalue Technologies' (SGX:A31) Earnings</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nThere May Be Underlying Issues With The Quality Of Addvalue Technologies' (SGX:A31) Earnings\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-05-29 12:29 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/sg/tech/sgx-a31/addvalue-technologies-shares/news/there-may-be-underlying-issues-with-the-quality-of-addvalue><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Addvalue Technologies Ltd's (SGX:A31) stock was strong after they recently reported robust earnings.  We did some analysis and think that investors are missing some details hidden beneath the profit ...</p>\n\n<a href=\"https://simplywall.st/stocks/sg/tech/sgx-a31/addvalue-technologies-shares/news/there-may-be-underlying-issues-with-the-quality-of-addvalue\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"A31.SI","symbol_name":"创值科技","start_time":0,"source_url":"https://simplywall.st/stocks/sg/tech/sgx-a31/addvalue-technologies-shares/news/there-may-be-underlying-issues-with-the-quality-of-addvalue","article_id":"2639564157","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/8111000-choice1-main-header/1585186745276"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/sg/tech/sgx-a31/addvalue-technologies-shares/news/there-may-be-underlying-issues-with-the-quality-of-addvalue","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2639564157","pubTimestamp":1780028986,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Addvalue Technologies Ltd's ( SGX:A31 ) stock was strong after they recently reported robust earnings. We did some...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"A31.SI":"创值科技"},"translate_title":"Addvalue Technologies(SGX：A31)的盈利质量可能存在潜在问题","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"A31.SI":1.5},"content_text":"Addvalue Technologies Ltd's (SGX:A31) stock was strong after they recently reported robust earnings.  We did some analysis and think that investors are missing some details hidden beneath the profit numbers.    Trump has pledged to \"unleash\" American oil and gas and these 15 US stocks have developments that are poised to benefit.SGX:A31 Earnings and Revenue History May 29th 2026 Advertisement A Closer Look At Addvalue Technologies' Earnings  In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow).  The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time.  This ratio tells us how much of a company's profit is not backed by free cashflow.  As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative.  While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio.  That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth.  For the year to March 2026, Addvalue Technologies had an accrual ratio of -0.18.   That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow.    Indeed, in the last twelve months it reported free cash flow of US$6.7m, well over the US$4.83m it reported in profit.    Addvalue Technologies' free cash flow improved over the last year, which is generally good to see.     Having said that, there is more to consider.  We must also consider the impact of unusual items on statutory profit (and thus the accrual ratio), as well as note the ramifications of the company issuing new shares.    See our latest analysis for Addvalue Technologies  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.   One essential aspect of assessing earnings quality is to look at how much a company is diluting shareholders.  As it happens, Addvalue Technologies issued 14% more new shares over the last year.  Therefore, each share now receives a smaller portion of profit.  To celebrate net income while ignoring dilution is like rejoicing because you have a single slice of a larger pizza, but ignoring the fact that the pizza is now cut into many more slices.  Check out Addvalue Technologies' historical EPS growth by clicking on this link.  A Look At The Impact Of Addvalue Technologies' Dilution On Its Earnings Per Share (EPS)  Addvalue Technologies was losing money three years ago.    On the bright side, in the last twelve months it grew profit by 147%.   On the other hand, earnings per share are only up 137% over the same period.      And so, you can see quite clearly that dilution is influencing shareholder earnings.    In the long term, earnings per share growth should beget share price growth.  So Addvalue Technologies shareholders will want to see that EPS figure continue to increase.   However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit.  For the ordinary retail shareholder, EPS is a great measure to check your hypothetical \"share\" of the company's profit.  The Impact Of Unusual Items On Profit  Surprisingly, given Addvalue Technologies' accrual ratio implied strong cash conversion, its paper profit was actually boosted by US$423k in unusual items.   While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution.  We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature.  Which is hardly surprising, given the name.   If Addvalue Technologies doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.    Our Take On Addvalue Technologies' Profit Performance In conclusion, Addvalue Technologies' accrual ratio suggests its earnings are well backed by cash but its boost from unusual items is probably not going to be repeated consistently.  Meanwhile, the dilution was a negative for shareholders.       Based on these factors, we think it's very unlikely that Addvalue Technologies' statutory profits make it seem much weaker than it is.     So while earnings quality is important, it's equally important to consider the risks facing Addvalue Technologies at this point in time.    While conducting our analysis, we found that Addvalue Technologies has 1 warning sign and it would be unwise to ignore this.   Our examination of Addvalue Technologies has focussed on certain factors that can make its earnings look better than they are.   But there are plenty of other ways to inform your opinion of a company.  For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying.  While it might take a little research on your behalf, you may find this free  collection of companies boasting high return on equity, or  this list of stocks with significant insider holdings to be useful.  New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave 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.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}