Understanding how Zhejiang United Investment Holdings Group Limited (SEHK:8366) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Zhejiang United Investment Holdings Group is doing by comparing its latest earnings with its long-term trend as well as the performance of its construction and engineering industry peers. View our latest analysis for Zhejiang United Investment Holdings Group
Did 8366 perform worse than its track record and industry?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to examine different stocks on a more comparable basis, using the most relevant data points. For Zhejiang United Investment Holdings Group, its latest twelve-month earnings is -HK$1.3M, which, relative to the prior year’s figure, has turned from positive to negative. Given that these values may be relatively short-term thinking, I’ve estimated an annualized five-year figure for Zhejiang United Investment Holdings Group’s net income, which stands at HK$7.1M.Additionally, we can analyze Zhejiang United Investment Holdings Group’s loss by researching what’s going on in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over the last couple of years has been negative at -2.48%. The key to profitability here is to make sure the company’s cost growth is well-managed. Scanning growth from a sector-level, the HK construction and engineering industry has been enduring some headwinds in the past twelve months, leading to average earnings dropping by more than half. This is a a notable change, given that the industry has been delivering a relatively flat growth rate over the last few years. This means that whatever recent headwind the industry is experiencing, it’s hitting Zhejiang United Investment Holdings Group harder than its peers.
What does this mean?
Though Zhejiang United Investment Holdings Group’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most valuable step is to assess company-specific issues Zhejiang United Investment Holdings Group may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Zhejiang United Investment Holdings Group to get a more holistic view of the stock by looking at:
1. Financial Health: Is 8366’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
2. Valuation: What is 8366 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 8366 is currently mispriced by the market.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.