VELESTO ENERGY (VELESTO-KU)

Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

Last Close Avg Daily Vol 52-Week High Trailing PE Annual Div ROE LTG Forecast 1-Mo Return
0.13 (MYR) 119M 0.41 41.7 -- 1.2% -- 18.2%
29 April 2020 Market Cap 52-Week Low Forward PE Dividend Yield Annual Rev Inst Own 3-Mo Return
MALAYSIA Exchange
1.2B 0.09 15.6 -- 671M 16.4% -63.4%

AVERAGE SCORE
NEGATIVE OUTLOOK: VELESTO's current Score Averages
score of 3 places it among the bottom quartile of Oil & Gas Group: 4.3 Mid Market Cap: 6.7
stocks scored. Fossil Fuels Sector: 4.4 FBM KLCI Index: 6.1

Average Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive PETRONM 9 8 7 8 8
PETDAG 8 8 8 7 6
Neutral HIBISCS 7 7 4 4 4
VELESTO 5 2 3 3 3
Negative
REACH 4 3 2 2 2
APR-2017 APR-2018 APR-2019 APR-2020

HIGHLIGHTS I/B/E/S MEAN

- The score for Velesto Energy last changed from 2 to 3 on
29/03/20 and has remained the same for 5 weeks. Buy Mean recommendation from all analysts covering
9 Analysts the company on a standardized 5-point scale.
- The recent change in the Average Score was primarily due to
an improvement in the Earnings component score.
Strong Strong
Sell Hold Buy
Sell Buy

PRICE AND VOLUME CHARTS

1-Year Return: -55.9% 5-Year Return: -93.9%

BUSINESS SUMMARY
Velesto Energy Berhad, formerly UMW Oil & Gas Corporation Berhad, is a Malaysia-based investment holding company. The Company is engaged in
providing corporate management, administrative and professional services, as well as financial support to its subsidiary companies. Its segments
include drilling services, oilfield services and others. Its drilling services segment provides drilling services and workover rig services to the upstream oil
and gas sector. The oilfield services segment provides oil country tubular goods (OCTG) threading, repair and inspection services. The others segment
is involved in investment holding, provision of support services, management and corporate services. The drilling services segment owns and operates
several drilling rigs and hydraulic workover units (HWUs), and acts as an agent for two providers of specialized equipment and service. The rigs are
chartered out to oil companies for their exploration, development and production activities.

Page 1 of 11
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VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

INDICATOR COMPONENTS
The AVERAGE SCORE combines the quantitative analysis of five widely-used investment decision making tools: Earnings,
Fundamental, Relative Valuation, Risk, and Price Momentum. A simple average of the underlying component ratings is normally
distributed to rank stocks on a 1-10 scale (10 being awarded to the most favorable). These factors may be evaluated differently using
alternative methodologies and the importance of individual factors varies across industries, market capitalization and investment styles.
Additional criteria should always by used to evaluate a stock.

Earnings Fundamental Relative Valuation Risk Price Momentum

PEER ANALYSIS Currency in MYR

PRICE MOMENTUM VALUATION FUNDAMENTAL ANALYSTS

Average Price 1-Mo 3-Mo 1-Yr Market Trailing Forward Dividend Net LTG I/B/E/S # of
Score Ticker (29/04/20) Return Return Return Cap PE PE Yield Margin Forecast Mean Analysts
6 PETDAG 20.20 0.0% -9.3% -16.5% 20.2B 24.3 28.1 3.5% 2.7% -- Hold 12
9 DIALOG 3.31 8.2% 1.2% 2.8% 18.2B 30.2 32.0 1.2% 25.9% 15.3% Buy 18
5 SERBADK 1.53 4.8% -32.9% -20.7% 4.8B 10.1 8.3 3.2% 11.0% 15.2% Buy 11
3 VELESTO 0.13 18.2% -63.4% -55.9% 1.2B 41.7 15.6 -- 5.0% -- Buy 9
8 PETRONM 3.75 25.0% -24.2% -44.4% 1.0B 5.5 7.3 5.3% 1.5% -- Hold 1
4 HENGYUAN 2.99 22.5% -19.2% -49.4% 894M 25.1 -- -- 0.3% -- -- --
4 HIBISCS 0.45 36.9% -51.1% -60.3% 707M 4.9 3.5 -- 16.5% -- Buy 3
5 KUB 0.30 57.9% -4.8% -25.9% 173M 9.6 -- -- 4.3% -- -- --
1 ENRA 1.00 -16.7% -16.7% -35.1% 143M -- 40.0 3.0% -13.0% -- Hold 1
6 STRAITS 0.17 17.9% -32.7% -32.7% 104M 17.8 -- -- 1.1% -- -- --
2 REACH 0.06 50.0% -64.7% -79.3% 66M -- -- -- -82.9% -- Hold 1
4.8 Average 3.08 20.4% -28.9% -38.0% 4.3B 18.8 19.3 3.2% -2.5% 15.2% Hold 7

PEER COMPANIES
PETDAG Petronas Dagangan HIBISCS Hibiscus Petroleum
DIALOG Dialog Group KUB KUB Malaysia
SERBADK Serba Dinamik Holdings ENRA ENRA Group
PETRONM Petron Malaysia Refining STRAITS Straits Inter Logistics
HENGYUAN Hengyuan Refining Co REACH Reach Energy

Page 2 of 11
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VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

EARNINGS Currency in MYR

POSITIVE OUTLOOK: Strong earnings with Earnings Score Averages

recent analyst upgrades or a history of Oil & Gas Group: 4.2 Mid Market Cap: 6.1
surpassing consensus estimates. Fossil Fuels Sector: 4.8 FBM KLCI Index: 6.2

Earnings Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive VELESTO 9 5 7 9 9
REACH 8 8 7 7 7
Neutral PETDAG 4 6 5 3 4
PETRONM 7 4 1 1 3
Negative
HIBISCS 3 5 1 1 1
APR-2017 APR-2018 APR-2019 APR-2020

EARNINGS INDICATORS
Earnings Surprises Estimate Revisions Recommendation Changes
(33.3% weight) (33.3% weight) (33.3% weight)

PETDAG
VELESTO

HIBISCS
REACH PETRONM
PETRONM REACH
VELESTO

PETDAG
HIBISCS PETDAG PETRONM
HIBISCS

REACH
VELESTO

Last 4 Years Last 4 Weeks Last 120 Days

# Positive Surprises (> 2%) 1 # Up Revisions 0 # Broker Upgrades 0
# Negative Surprises (< -2%) 2 # Down Revisions 2 # Broker Downgrades 0
# In-Line Surprises (within 2%) 1 Avg Up Revisions 0.0%
Avg Surprise 3.6% Avg Down Revisions -22.2%

HIGHLIGHTS PRICE TARGET

- Velesto Energy currently has an Earnings Rating of 9, which is The chart indicates where analysts predict the stock price will be within
significantly more bullish than the Oil & Gas Exploring & Prod industry the next 12 months, as compared to the current price.
average of 5.7.
0.60 12-Month Price Target
- Over the past 90 days, the consensus price target for VELESTO has Mean (MYR) 0.34
decreased notably from 0.44 to 0.34, a loss of -22.4%. 0.50
HIGH
High 0.46
0.40
- There have been no upward or downward broker recommendation MEAN Low 0.14
changes for Velesto Energy over the past 120 days. 0.30 Target vs. Current 161.5%
0.20 0.13 # of Analysts 9
LOW
0.10
Current Price Price Target
(MYR)

Page 3 of 11
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VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

EARNINGS PER SHARE

Actuals Estimates

Earnings per share (EPS) is calculated Quarterly NA NA

by dividing a company's earnings by the Mean -- --
number of shares outstanding. Analysts Quarterly data is not available
tend to interpret a pattern of increasing High -- --
earnings as a sign of strength and flat Low -- --
or falling earnings as a sign of
# of Analysts -- --
weakness.

The charts provide a comparison NA NA NA NA

between a company's actual and
estimated EPS, including the high and Actuals Estimates
low forecasts. 0.040

0.030 Annual 2020 2021

Mean 0.006 0.009
0.020
HIGH High 0.009 0.016
0.010 0.004 MEAN Low -0.001 -0.003
-0.002
0.000 # of Analysts 9 9
LOW

-0.010
2018 2019 2020 2021

MEAN ESTIMATE TREND ANALYST RECOMMENDATIONS

Q Q Y Y Price I/B/E/S Mean: Buy (9 Analysts)
-- -- 2020 2021 Target
Current -- -- 0.006 0.009 0.34
Strong Buy 2
30 Days Ago -- -- 0.008 0.012 0.41 Buy 6
90 Days Ago -- -- 0.009 0.015 0.44 Hold 1
% Change (90 Days) -- -- -33.3% -40.0% -22.4%
Sell 0
Current Fiscal Year End: 12-20
Next Expected Report Date: 25/05/20 Strong Sell 0

EARNINGS SURPRISES
Comparing a company's actual earnings to the mean expectation of Surprise Detail (Last 6 Periods)
analysts results in a difference referred to as a 'positive' or 'negative'
surprise. Research has shown that when a company reports a Surprise Announce Period End Actual Mean Surprise
surprise, it is often followed by more of the same surprise type. Type Date Date EPS EPS (%)
Surprise Summary (Last 6 Years) In-Line 25/02/20 31/12/19 0.004 0.004 0.0%
Positive 27/02/19 31/12/18 -0.002 -0.003 33.3%
Surprise Type Amount Percent
Negative 27/02/18 31/12/17 -0.063 -0.061 -3.3%
Positive Years (> 2%) 1 16.7%
Negative 27/02/17 31/12/16 -0.184 -0.159 -15.7%
Negative Years (< -2%) 4 66.7%
Negative 23/02/16 31/12/15 -0.016 0.008 -300.0%
In-Line Years (within 2%) 1 16.7%
Negative 23/02/15 31/12/14 0.113 0.117 -3.4%

ANNUAL REVENUE
A pattern of increasing sales in Actuals Estimates
conjunction with a rising EPS may
influence a buy recommendation, while 880M
HIGH 2020 2021
flat or falling sales and faltering 800M
earnings may explain a sell Mean 694.6M 737.0M
recommendation. A rising EPS with flat 720M 670.8M
MEAN
High 789.4M 840.9M
or falling sales may result from
increased cost efficiency and margins, 640M
Low 580.0M 538.0M
573.2M
rather than market expansion. This Forecasted Growth 3.5% 9.9%
chart shows the sales forecast trend of 560M
LOW # of Analysts 9 9
all analysts and the highest and lowest
projections for the current and next 480M
2018 2019 2020 2021
fiscal year.

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VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

FUNDAMENTAL
NEUTRAL OUTLOOK: Fundamentals relatively Fundamental Score Averages
in-line with the market. Oil & Gas Group: 6.0 Mid Market Cap: 6.8
Fossil Fuels Sector: 5.7 FBM KLCI Index: 5.8

Q2 Q3 Q4 Q1
Fundamental Score Trend Peers 2019 2019 2019 2020 Current 3Y Trend
PETRONM 9 8 8 NR 10
Positive
HIBISCS 10 10 10 NR 8
Neutral PETDAG 6 6 7 NR 8

Negative VELESTO 5 6 8 NR 6

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 REACH 5 4 5 NR 2
2017 2018 2019

FUNDAMENTAL INDICATORS
Profitability Debt Earnings Quality Dividend
(25% weight) (25% weight) (25% weight) (25% weight)

HIBISC… PETDA…
PETRO… PETRO…
VELEST… PETRO…

PETDA… REACH
PETDA…
HIBISC… VELEST…
PETRO…
VELEST… HIBISC…

REACH REACH PETDA…

HIBISC…
REACH
VELEST…

Revenue Growth 16.9% Current Ratio 1.8 Oper. Cash Yield 535.2% Dividend Growth --
For year over year For interim period For latest 12 months For year over year
ending 12-2019 ending 12-2019 ending 12-2019 ending --
Gross Margin 16.8% Debt-to-Capital 26.1% Accruals -3.2% Dividend Payout --
For latest 12 months For annual period For latest 12 months For latest 12 months
ending 12-2019 ending 12-2019 ending 12-2019 ending --
Return On Equity 1.2% Interest Funding 35.7% Days Sales In Inv. 186.3 Dividend Coverage --
For interim period For interim period For annual period For annual period
ending 12-2019 ending 12-2019 ending 12-2019 ending --
Net Margin 5.0% Interest Coverage 1.8 Days Sales In Rec. 147.9 Current Div. Yield --
For latest 12 months For interim period For annual period For latest 12 months
ending 12-2019 ending 12-2019 ending 12-2019 ending --

HIGHLIGHTS
- Velesto Energy currently has a relatively neutral Fundamental Rating - The days sales in inventory for VELESTO is the highest within its Oil &
of 6. The average Fundamental Rating for its Oil & Gas industry Gas industry group.
group is 6.0 and the FTSE BURSA MALAYSIA COMPOSITE index - Velesto Energy does not currently pay a dividend. Of 9 firms within
average is 5.9. the Oil & Gas industry group, it is among the 6 companies without a
- The company's return on equity has been lower than its industry group dividend.
average for each of the past five years.
- The current ratio of 1.8 for VELESTO is the highest within its Oil &
Gas industry group.

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VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

RELATIVE VALUATION
NEGATIVE OUTLOOK: Multiples significantly Relative Valuation Score Averages
above the market or the stock's historic norms. Oil & Gas Group: 6.3 Mid Market Cap: 4.8
Fossil Fuels Sector: 7.4 FBM KLCI Index: 2.6

Relative Valuation Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive HIBISCS 9 8 10 10 10
PETRONM 10 10 10 10 10
Neutral REACH 7 7 8 8 8
PETDAG 4 5 2 3 3
Negative
VELESTO 1 1 2 2 2
APR-2017 APR-2018 APR-2019 APR-2020

RELATIVE VALUATION INDICATORS

Price to Sales Trailing PE Forward PE
(50% weight) (25% weight) (25% weight)

PETRONM HIBISCS HIBISCS

REACH PETRONM PETRONM

HIBISCS
PETDAG VELESTO
VELESTO

PETDAG
PETDAG
VELESTO

REACH REACH

Price to Sales 1.7 Trailing PE 41.7 Forward PE 15.6

5-Yr Average 3.9 5-Yr Average 37.0 5-Yr Average 69.2
Rel. to 5-Yr Avg. 56% Discount Rel. to 5-Yr Avg. 13% Premium Rel. to 5-Yr Avg. 77% Discount
FBM KLCI Index 2.3 FBM KLCI Index 16.3 FBM KLCI Index 16.7
Rel. to FBM KLCI 26% Discount Rel. to FBM KLCI >100% Premium Rel. to FBM KLCI 6% Discount

HIGHLIGHTS
- Velesto Energy currently has a Relative Valuation Rating of 2 while - VELESTO's Trailing P/E of 41.7 represents a 13% Premium to its 5-
the FTSE BURSA MALAYSIA COMPOSITE index has an average year average of 37.0.
rating of 2.8. - VELESTO's current Forward P/E of 15.6 represents a 28% Discount to
- Compared to the Oil & Gas industry group, VELESTO is currently its Oil & Gas industry group average.
trading at a significant premium based on both Price to Sales ratio and
Trailing P/E.
- Based on Price to Sales, VELESTO currently trades at a >100%
Premium to its Oil & Gas industry group peers. On average, the
company has traded at a >100% Premium over the past five years.

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VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

PRICE TO SALES TRAILING PE

The most recent week's close price divided by the revenue per share. The most recent week's close price divided by the sum of the four most
recently reported quarterly earnings.
Price to Sales: 1.7 Trailing PE: 41.7
5-Year Average: 3.9 5-Year Average: 37.0
FBM KLCI Index Average: 2.3 FBM KLCI Index Average: 16.3
Oil & Gas Group Average: 0.5 Oil & Gas Group Average: 22.7
11.0 >50
10.0 45
9.0 40
5-Yr Average
8.0 35
7.0 30
6.0 25
5.0 20
4.0 5-Yr Average 15
3.0 10
2.0 5
1.0 0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

FORWARD PE FORWARD PEG

The most recent week's close price divided by the sum of the four The Forward P/E divided by the five-year forecasted growth rate.
upcoming quarterly consensus estimates.
Forward PE: 15.6 Forward PEG: --
5-Year Average: 69.2 5-Year Average: --
FBM KLCI Index Average: 16.7 FBM KLCI Index Average: 2.8
Oil & Gas Group Average: 21.8 Oil & Gas Group Average: --
>50 5.0
45 4.5
40 4.0
35 3.5
30 3.0
25 2.5
20 2.0
15 1.5
10 1.0
5 0.5
0 0.0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019

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VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

RISK
NEGATIVE OUTLOOK: Variable return patterns Risk Score Averages
(high volatility). Oil & Gas Group: 4.8 Mid Market Cap: 7.6
Fossil Fuels Sector: 3.5 FBM KLCI Index: 9.0

Risk Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive PETDAG 9 9 10 10 10
PETRONM 7 7 7 7 7
Neutral HIBISCS 4 2 3 3 3
VELESTO 4 3 3 3 3
Negative
REACH 2 1 1 1 1
APR-2017 APR-2018 APR-2019 APR-2020

RISK INDICATORS
Magnitude of Returns Volatility Beta (1-year) Correlation
(25% weight) (25% weight) (25% weight) (25% weight)

PETDA… HIBISC…
PETDA… PETDA…
PETRO… PETRO…

VELEST… PETDA…
PETRO… HIBISC…
PETRO… VELEST…

REACH
VELEST… HIBISC…
VELEST… REACH
REACH REACH
HIBISC…

Daily Returns (Last 90 Days) Standard Deviation Beta vs. FBM KLCI 3.02 Correlation vs. FBM KLCI
Best 37.5% Last 90 Days 9.68 Positive Days Only 2.60 Last 90 Days 64%
Worst -48.3% Last 60 Months 11.49 Negative Days Only 4.25 Last 60 Months 21%
Monthly Returns (Last 60 Months) Intra-Day Swing (Last 90 Days) Beta vs. Group 1.68 Correlation vs. Group
Best 31.6% Average 9.1% Positive Days Only 1.72 Last 90 Days 94%
Worst -31.8% Largest 48.4% Negative Days Only 1.96 Last 60 Months 37%

HIGHLIGHTS RISK ANALYSIS

- Velesto Energy currently has a Risk Rating of 3, which is Last 90 Days Last 60 Months
significantly below the FTSE BURSA MALAYSIA COMPOSITE Best Worst # # Largest Best Worst
index average rating of 9.2. Daily Daily Days Days Intra-Day Monthly Monthly
- On days when the market is up, VELESTO shares tends to Peers Return Return Up Down Swing Return Return
outperform the FTSE BURSA MALAYSIA COMPOSITE index. VELESTO 37.5% -48.3% 28 32 48.4% 31.6% -31.8%
However, on days when the market is down, the shares
generally decrease by more than the index. HIBISCS 28.4% -42.3% 24 39 24.4% 53.6% -60.2%
- In the short term, VELESTO has shown high correlation (>= PETDAG 6.5% -5.5% 28 34 12.0% 11.1% -9.0%
0.4) with the FTSE BURSA MALAYSIA COMPOSITE index.
The stock has, however, shown average correlation (>= 0.2 PETRONM 9.5% -14.0% 26 34 13.0% 41.3% -24.2%
and < 0.4) with the market in the long term.
REACH 50.0% -35.0% 14 24 57.1% 33.3% -31.8%
- Over the last 90 days, VELESTO shares have been more
volatile than the overall market. The stock's daily price FBM KLCI 6.9% -5.3% 31 34 6.4% 5.5% -10.4%
fluctuations have exceeded that of all FTSE BURSA
MALAYSIA COMPOSITE index firms.

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VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

PRICE MOMENTUM Currency in MYR

NEGATIVE OUTLOOK: Weak recent price Price Momentum Score Averages

performance or entering historically poor Oil & Gas Group: 3.0 Mid Market Cap: 5.3
seasonal period. Fossil Fuels Sector: 3.1 FBM KLCI Index: 5.0

Price Momentum Score Trend (4-Week Moving Avg) Peers -6M -3M -1M -1W Current 1Y Trend

Positive PETDAG 7 7 8 7 5
PETRONM 3 4 3 5 3
Neutral HIBISCS 5 7 1 1 1
REACH 3 2 1 1 1
Negative
VELESTO 8 4 1 1 1
APR-2017 APR-2018 APR-2019 APR-2020

PRICE MOMENTUM INDICATORS

Relative Strength Seasonality
(70% weight) (30% weight)

PETDAG PETDAG
PETRONM PETRONM

HIBISCS HIBISCS
REACH REACH
VELESTO VELESTO

Relative Strength Indicator (Scale from 1 to 100) Average Monthly Return (Last 10 Years)
VELESTO Industry Avg APR MAY JUN
Last 1 Month 38 41 Company Avg -0.2% -6.8% -1.9%
Last 3 Months 39 40 Industry Avg -- -- --
Last 6 Months 42 42 Industry Rank -- -- --

PRICE PERFORMANCE
Daily close prices are used to calculate the VELESTO VELESTO FBM Mid
performance of the stock as compared to a
FBM Mid Close Price (29/04/20) 0.13 11,385
relevant index over five time periods.
52-Week High 0.41 14,951
-10.3%
1-Week 52-Week Low 0.09 9,194
0.2%

18.2% - The Price Momentum Rating for Velesto Energy is at its 3-year
1-Month
8.1% low of 1.
- On 29/04/20, VELESTO closed at 0.13, 68.3% below its 52-
-63.4%
3-Month week high and 44.4% above its 52-week low.
-18.3%
- VELESTO shares are currently trading 28.6% below their 50-
-65.8% day moving average of 0.18, and 57.4% below their 200-day
YTD moving average of 0.31.
-19.9%

-55.9%
1-Year
-22.7%

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VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

DETAILED STOCK REPORT TIPS Mean Estimate Trend

The mean estimates show how the consensus has changed over the past 30 days
The Stock Report from Refinitiv is a comprehensive, company-specific analysis that and 90 days for the upcoming two quarters (when available) and two years. The
includes a proprietary Stock Rating along with underlying component indicators and percentage change is calculated for the company as a means for comparison by
supportive data elements. The report is updated daily, although some of the data measuring the difference between the current consensus estimate and that of 90
elements and the ratings are updated weekly. days ago.
Average Score Analyst Recommendations
The Stock Reports Plus Average Score combines a quantitative analysis of five The I/B/E/S Mean is the average recommendation of all analysts covering the stock,
widely-used investment decision making tools - Earnings, Fundamental, Relative as provided by I/B/E/S, the Institutional Brokers Estimate System, from Refinitiv.
Valuation, Risk, and Price Momentum. First, a simple average of the five underlying The recommendations are presented on a five-point standardized scale: strong buy,
component ratings is calculated. Then, a normal distribution is used to rank each buy, hold, reduce, and sell.
stock across the market on a scale of 1 to 10, with 10 being most favorable. A
score of 8 to 10 is considered positive, 4 to 7 is neutral, and 1 to 3 is negative. Earnings Surprises
These five factors may be evaluated differently using alternative methodologies, ● The surprise summary includes the total number of time periods (and
and the importance of individual factors varies across industry groups, market percentage) in the last 12 quarters (quarterly) or last 4 years (annual) in which
capitalization and investment styles. Additional criteria should always be used to earnings surprises were positive, negative, or in-line. In order to be recognized
evaluate a stock. as a positive or negative surprise, the percent must be greater than 2% above or
2% below the consensus, respectively.
A company must have sufficient data available for at least three of the five ● The surprise detail section includes a listing of the company's quarterly earnings
component indicators in order to receive an overall Average Score. Approximately reported for the most recent 6 periods (quarters or years). The consensus
85% of the stocks within the coverage universe meet the criteria to generate a analyst estimate is provided to determine if the actual earnings report
score. represented a positive surprise, negative surprise, or in-line result.
Indicator Components Fundamental
The five indicators that comprise the stock rating are displayed. Like the stock The Fundamental Rating is based on a combination of four fundamental component
rating, the component rating scale is 1 to 10, with 10 being best. A company will factors: profitability, debt, earnings quality, and dividend. Companies that do not
receive an ‘NR’ for No Rating if the required data elements or criteria are not met. A pay a dividend are not penalized. Each factor is equally weighted. Then, equal
detailed section for each component is included in the report. deciles are used to rank each stock across the market on a scale of 1 to 10, with 10
being most favorable. A stock needs to have at least two of the four fundamental
Indicator Trends factors present in order to receive a score.
Within each component section, historical score trends are displayed, typically using
a 4-week moving average over a timeframe of the past three years. The dotted ● Profitability is comprised of four data elements.
orange line indicates the average of the scores over those three years. The most - Revenue Growth: (Net Sales – Previous Net Sales) / Previous Net Sales
recent occurrences of the best and worst scores are also displayed on the chart in - Gross Margin: Gross Profit / Net Sales
grey boxes to put the current score into historical context. - Return on Equity: Net Income / Total Equity
- Net Margin: Net Profit / Net Sales
Next to the trend chart for the company, current score averages are included, along ● Debt is comprised of four data elements.
with peer company comparisons of values from 6 months ago, 3 months ago, 1 - Current Ratio: Current Assets / Current Liabilities
month ago, the most recent value from 1 week ago, and the current score. The four - Debt-to-Capital: Total Debt / Total Capital
closest industry peers are presented based on similar market capitalization. - Interest Funding: (Interest Expense on Debt + Preferred Cash Dividends) /
Funds from Operations
Peer Analysis - Interest Coverage: Earnings before Interest and Taxes / (Interest Expense on
● The Refinitiv Business Classification (TRBC) schema is used for industry Debt + Preferred Cash Dividends)
comparisons. It is designed to track and display the primary business of a ● Earnings Quality is comprised of four data elements.
corporation by grouping together correlated companies that offer products and - Operating Cash Yield: (Operating Cash Flow – Net Income) / Net Income
services into similar end markets. The system includes 10 Economic Sectors, 28 - Accruals: (Net Income – Operating Cash Flow – Investing Cash Flow) /
Business Sectors, 54 Industry Groups, and 136 Industries. Average Net Operating Assets
● The Peer Analysis section of the report compares the company to its ten closest - Days Sales in Inventory: 365 / (Cost of Goods Sold / Inventory)
peers. The peers are selected from the industry based on similar market - Days Sales in Receivables: 365 / (Net Sales / Receivables)
capitalization. The peer listing may have fewer than ten companies if there are ● Dividend is comprised of four data elements. The company must have a current
fewer than ten companies within that industry classification. dividend yield.
- Dividend Growth Rate: (Dividends per Share – Previous Dividends per Share)
Highlights / Previous Dividends per Share
The automated text-generation system from Refinitiv creates highlights - Dividend Payout: Dividends per Share / Earnings per Share
summarizing the most noteworthy data. The bullets will vary by company and will - Dividend Coverage: Funds from Operations / Cash Dividends
change from week to week as different criteria are met. - Dividend Yield: Annual Dividends per Share / Current Market Price per Share

Earnings Indicator Trend

The Earnings Rating is based on a combination of three factors: earnings surprise, The fundamental indicator trend displays either quarterly scores over the past three
estimate revision, and recommendation changes. Each factor is equally weighted. years or annual scores over the past six years, depending on the reporting periods
Then, equal deciles are used to rank each stock across the market on a scale of 1 for the country. The best and worst scores can be easily determined from the
to 10, with 10 being most favorable. A stock needs to have at least two of the three values shown on the chart for each quarter or year.
earnings factors in order to receive a score.
Relative Valuation
● Earnings Surprises - The number of positive and negative surprises within the The Relative Valuation Rating is based on a combination of three component
last 4 periods (quarters or years). factors: Price to Sales (50% weight), Trailing P/E (25% weight), and Forward P/E
● Estimate Revisions - The number of up and down revisions and the average (25% weight). After the weightings are considered to combine individual factors,
percentage change of those revisions within a 4 week period. equal deciles are used to rank each stock across the market on a scale of 1 to 10,
● Recommendation Changes - The number of broker upgrades and downgrades in with 10 being most favorable. These common valuation metrics are evaluated
the last 120 days. against the overall market, the index, and the company's own historic 5-year
averages. A stock needs to have at least one of the three relative valuation factors
Price Target in order to receive a score.
The price target is based on the predictions of analysts covering the stock and
shows the high, low and mean price expected within the next 12 months. ● Price to Sales: Close Price / (Sales for 4 Quarters or 1 Year / Shares
Outstanding)
Earnings Per Share ● Trailing P/E: Close Price / Most Recent 4 Quarters or 1 Year of Earnings
The quarterly and annual earnings per share are presented when available, along ● Forward P/E: Close Price / Upcoming 4 Quarters or 1 Year of Earnings
with the mean, high and low. Quarterly data is displayed for the past 4 quarters
(actual) and the next 2 quarters (estimated). Annual data is displayed for the past 2
years (actual) and the next 2 years (estimated).

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© 2020 Refinitiv. All rights reserved.
VELESTO ENERGY (VELESTO-KU)
Fossil Fuels / Oil & Gas / Oil & Gas Exploring & Prod. DETAILED STOCK REPORT
Report Date: 29 April 2020

Valuation Averages
Negative values are excluded when calculating the averages. A maximum value of
100 is placed on Trailing P/E and Forward P/E, a maximum value of 5 is placed on
Forward PEG, and a maximum value of 20 is placed on Price to Sales when
calculating the averages. Higher values are rounded down to the maximum for the
averages.

Valuation Multiples
The valuation multiples provide the Trailing P/E, Forward P/E, Forward PEG, and
Price to Sales for the company and the S&P 500 index average. In addition, a
comparison of the current company’s values to its 5-year average and an industry
average are presented. A discount occurs when the company’s ratio is valued
more favorably (lower) than that to which it is compared.

Risk
The Risk Rating displays stocks on a scale of 1 to 10 with 10 being awarded to the
least risky stocks. It is derived by looking at a series of long-term (5-year) and
short-term (90-day) stock performance measures including volatility, magnitude of
returns, beta, and correlation. Each factor is equally weighted. Then, equal deciles
are used to rank each stock across the market. A stock needs to have at least two
of the four risk factors in order to receive a score.

● Magnitude of Returns – The best / worst daily returns in the past 90 days and the
best / worst monthly returns in the past 60 months.
● Volatility – The standard deviation of the stock price over the last 90 days and
last 60 months, along with the average and largest intra-day stock swing.
● Beta – Measures the tendency of a security’s returns to respond to swings in the
market, based on the beta of the company versus the relevant index.
● Correlation – Determines how closely the returns of the stock and the relevant
index move together, measured over the last 90 days and last 60 months.

Risk Analysis
Price analysis for the company and the relevant index is provided over two time
periods. Daily analysis is provided for the last 90 days, whereas monthly statistics
are used for the last 60 months.

Price Momentum
The Price Momentum Rating is based on a combination of two technical
performance factors: relative strength (70% weight) and seasonality (30% weight).
After the weightings are considered to combine individual factors, equal deciles are
used to rank each stock across the market on a scale of 1 to 10, with 10 being most
favorable. A stock needs to have data for the relative strength factor in order to
receive a score.

● Relative Strength – The relative strength of the company for the last 1 month, 3
months, and 6 months on a scale of 1 to 100.
● Seasonality – The average monthly return (price performance) for the current
month and next 2 months for the company and industry, over the past 10 years.
A lower industry rank indicates a higher return.

Price Performance
Daily close prices are used to calculate the price performance of the stock. The
performance of the relevant index is also displayed as a means of comparison.

DISCLAIMER
© 2020 Refinitiv. Republication or redistribution of Refinitiv content, including by
framing or similar means, is prohibited without the prior written consent of Refinitiv.
All information in this report is assumed to be accurate to the best of our ability.
Refinitiv is not liable for any errors or delays in Refinitiv content, or for any actions
taken in reliance on such content.

Any forward-looking statements included in the Refinitiv content are based on

certain assumptions and are subject to a number of risks and uncertainties that
could cause actual results to differ materially from current expectations. There is no
assurance that any forward-looking statements will materialize.

The content in this Refinitiv report does not constitute investment advice or a
recommendation to buy or sell securities of any kind. Past performance is not a
guarantee of future results. Investors should consider this report as only a single
factor when making an investment decision.

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