Bullbear Buffett : BM Greentech

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Tuesday, 9 June 2026

BM Greentech

BM GreenTech (also known as BMG) has successfully transformed from a palm oil mill boiler specialist into a multi-segment green infrastructure company. The company is now a key player in Malaysia's energy transition, leveraging strong engineering capabilities and a robust balance sheet to drive growth across three core business areas.

📊 Description of Business and Revenue Segments

🛡️ Durable Competitive Advantages

Competitive analysis yields mixed views, but points to defendable strengths within its niche.

Dominant Bio-Energy Position: In its foundational boiler business, BMG is considered the "king" of biomass in Malaysia. This 30% market share, built on long-standing relationships and specialized technical knowledge, provides a reliable earnings base and high switching costs for clients.
Strategic Pivot to High-Growth Solar: The acquisition of PXH has successfully positioned BMG at the forefront of Malaysia's National Energy Transition Roadmap (NETR). With a strong track record in utility-scale projects, BMG is well-positioned to bid on future government tenders, such as the upcoming LSS5 and LSS6 rounds.
Fortress Balance Sheet: Backed by major shareholder QL Resources, BMG enjoys a net cash position with a reported RM285 million cash reserve to fund expansion. This financial strength is a significant advantage, allowing it to bid on large-scale projects and explore asset ownership for long-term recurring revenue.
The Moat Debate: While some assessments assign a low moat score, focusing on the project-based, competitive nature of EPCC contracting, others point to the company's integrated solutions, entrenched market position, and financial backing as clear competitive strengths within its chosen niches.

📈 Financial Statement Analysis

Its financial data shows a company executing a complex strategic pivot while maintaining robust financial health.

Revenue Growth & Profitability Drivers
BMG has achieved remarkable top-line growth, driven by its strategic pivot. Revenue surged from RM317.8M in FY2022 to RM600.96M in FY2026, representing a compound annual growth rate (CAGR) of approximately 17.2%.

The significant jump in Gross Profit Margin starting in FY2024 is particularly striking. This is likely due to a combination of higher-margin boiler projects, lower input costs (like steel), and the consolidation of the higher-margin solar EPCC work. The stabilization of net margin around ~8-9% in FY2025-2026 suggests the business is reaching a new, more profitable operational baseline.

Cost Structure & Earnings Quality
SG&A expenses are a growing part of the cost structure, increasing from 8.3% of revenue in FY2022 to 13.0% in FY2026. This is likely due to the integration of PXH and increased business development for the new solar and water segments.

Segment Growth - The quarterly breakdown suggests the revenue mix has shifted, with the Solar segment now a major contributor alongside the core Bio-Energy business, aligning with the company's strategic goals.

Profitability & Leverage - The Net Income trend shows a strong recovery from a dip in FY2023, followed by substantial growth in FY2024 and FY2025. The slight dip in FY2026 net margin is not necessarily a concern, as it could be due to one-off project completions or continued investment in new initiatives. Meanwhile, the Interest Coverage Ratio (calculated as EBIT / Interest Expense) improved from ~128x in FY2022 to a healthy 103x in FY2026, indicating a very low-risk balance sheet with minimal leverage.

Earnings Per Share
The Basic Shares Outstanding grew significantly in FY2026 (by ~17%), likely due to new shares issued for acquisitions or employee incentives. This accounts for the discrepancy between a stable net income and the slight decline in EPS growth. On an absolute basis, earnings power remains strong.

💎 Conclusion

BM GreenTech is in a strong financial position. Its traditional business provides a solid foundation, while its successful expansion into solar energy, backed by a robust balance sheet and supportive government policies, positions it well for future growth. The company appears to be successfully executing its strategic vision to become a key integrated player in Malaysia's renewable energy landscape.

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My 18 points guide to Successfully compounding your money in Stocks

Be a good stock picker.
Think as a business owner.
Always look at value rather than the price. Do the homework.
Buy and hold is alright for selected stocks.
Compounding is your friend, get this to work its magic.
Mr. Market is there to be taken advantage of. Do not be the sucker instead. BFS;STS.
Always buy a lot when the price is low.
Never buy when the stock is overpriced.
It is alright to buy when the selected stock is at a fair price.
Phasing in or dollar cost averaging is safe for such stocks during a downtrend, unless the price is still obviously too high.
Do not time the market for such or any stocks.
By keeping to the above strategy, the returns will be delivered through the growth of the company's business.
So, when do you sell the stock? Almost never, as long as the fundamentals remain sound and the future prospects intact.
The downside risk is protected through only buying when the price is low or fairly priced.
Tactical dynamic asset allocation or rebalancing based on valuation can be employed but this sounds easier than is practical, except in extreme market situations.
Sell urgently when the company business fundamental has deteriorated irreversibly.
You may also wish to sell should the growth of the company has obviously slowed and you can reinvest into another company with greater growth potential of similar quality. However, unlike point 16, you can do so leisurely.
In conclusion, a critical key to successful investing is in your stock picking ability.

http://myinvestingnotes.blogspot.com/2012/07/my-18-points-guide-to-successfully.html

11 Lessons From Peter Lynch

Peter Lynch taught me:

1. Behind every stock is a company. Find out what it’s doing.
2. Never invest in any idea you can’t illustrate with a crayon.
3. Over the short term, there may be no correlation between the success of a company’s operations and the success of its stock. Over the long term, there’s a 100% correlation.
4. Buying stocks without studying the companies is the same as playing poker – and never looking at your cards.
5. Time is on your side when you own shares of superior companies.
6. Owning stock is like having children. Don’t get involved with more than you can handle.
7. When the insiders are buying, it’s a good sign.
8. Unless you’re a short seller, it never pays to be pessimistic.
9. A stock market decline is as predictable as a January blizzard in Colorado. If you’re prepared, it can’t hurt you.
10. Everyone has the brainpower to make money in stocks. Not everyone has the stomach.
11. Nobody can predict interest rates, the future direction of the economy, or the stock market. Dismiss all such forecasts and concentrate on what’s actually happening to the companies in which you’ve invested.

Lynch’s advice had a profound effect on my stock market approach. He taught me that investment success isn’t the result of developing the right macro-economic view or deciding when to jump in or out of the market. Success is about researching companies to identify those that are likely to report positive surprises.

Capital Expenditure

A great company with a Durable Competitive Advantage will have a ratio of Capital Expenditures to Net Income of less than 25%. Less is better.

Capital Expenditures are expenses on:
- fixed assets such as equipment, property, or industrial buildings
- fixing problems with an asset
- preparing an asset to be used in business
- restoring property
- starting new businesses

A good company will have a ratio of Capital Expenditures to Net Income of less than 50%.

A great company with a Durable Competitive Advantage will have a ratio of less than 25%.

Less is better.

Benjamin Graham's 113 Wise Words

The true investor scarcely ever is forced to sell his shares, and at all times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgement."

Philip Fisher's Wise Words

"The refusal to sell at a loss, while completely natural and normal, is probably one of the most dangerous in which we can indulge ourselves in the entire investment process.

More money has probably been lost by investors holding a stock they really did not want until they could 'at least come out even' than from any other single reason. If to these actual losses are added the profits that might have been made through the proper reinvestment of these funds if such reinvestment had been made when the mistake was first realized, the cost of self-indulgence becomes truly tremendous."

(Common Stocks and Uncommon Profits)

The Ultimate Hold-versus-Sell Test

Here is the overriding primary test, followed by observations on why it is so critically important:

Knowing all that you now know and expect about the company and its stock (not what you originally believed or hoped at time of purchase), and assuming that you had available capital, and assuming that it would not cause a portfolio imbalance to do so, would you buy this stock today, at today's price?

No equivocation. Yes or no?

Answers such as maybe or probably are not acceptable since they are ways of dodging the issue. No investor probably buys a stock; they either place an order or do not.

Here is the implication of your answer to that critical test: if you did not answer with a clear affirmative, you should sell; only if you said a strong yes, are you justified to hold.

Some thoughts on Analysing Stocks (KISS)

Ideally a stock you plan to purchase should have all of the following charateristics:

• A rising trend of earnings dividends and book value per share.
• A balance sheet with less debt than other companies in its particular industry.
• A P/E ratio no higher than average.
• A dividend yield that suits your particular needs.
• A below-average dividend pay-out ratio.
• A history of earnings and dividends not pockmarked by erratic ups and downs.
• Companies whose ROE is 15 or better.
• A ratio of price to cash flow (P/CF) that is not too high when compared to other stocks in the same industry.

Margin of Safety Concept: Stocks should be bought like groceries, not like perfume

The high CAGR in the early years of the investing period, due to buying at a discount, tended to decline and approach that of the intrinsic EPS GR of the companies over a longer investment time-frame.

Chapter 20 - “Margin of Safety” as the Central Concept of Investment

A single quote by Graham on page 516 struck me:

Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.

Basically, Graham is saying that most stock investors lose money because they invest in companies that seem good at a particular point in time, but are lacking the fundamentals of a long-lasting stable company.

This seems obvious on the surface, but it’s actually a great argument for thinking more carefully about your individual stock investments. If most of your losses come from buying companies that seem healthy but really aren’t, isn’t that a profound argument for carefully studying any company you might invest in?

Bullbear Buffett

Tuesday, 9 June 2026

BM Greentech

📊 Description of Business and Revenue Segments

🛡️ Durable Competitive Advantages

📈 Financial Statement Analysis

💎 Conclusion

All equity security investments present a risk of loss of capital

The Ultimate Hold-versus-Sell Test

Some thoughts on Analysing Stocks (KISS)

Benjamin Graham

Sell the losers, let the winners run.

Investment Style

Warren Buffett

Political and Economic News

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