Examining China Dongxiang (Group) Co Ltd’s (SEHK:3818) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 3818’s latest performance announced on 30 June 2017 and weight these figures against its longer term trend and industry movements. Check out our latest analysis for China Dongxiang (Group)
How Well Did 3818 Perform?
I look at the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend enables me to assess many different companies on a more comparable basis, using the most relevant data points. For China Dongxiang (Group), its most recent trailing-twelve-month earnings is CN¥927.6M, which, in comparison to the prior year’s figure, has declined by -6.46%. Since these values may be somewhat short-term, I have computed an annualized five-year figure for China Dongxiang (Group)’s earnings, which stands at CN¥577.2M. This means despite the fact that earnings declined against last year, in the long run, China Dongxiang (Group)’s profits have been growing on average.How has it been able to do this? Let’s take a look at whether it is solely a result of industry tailwinds, or if China Dongxiang (Group) has experienced some company-specific growth. In the past few years, China Dongxiang (Group) increased bottom-line, while its top-line declined, by efficiently managing its costs. This resulted in to a margin expansion and profitability over time. Viewing growth from a sector-level, the HK luxury industry has been growing its average earnings by double-digit 43.31% over the past year, . This is a change from a volatile drop of -19.66% in the previous couple of years. This means in the recent industry expansion, China Dongxiang (Group) has not been able to leverage it as much as its industry peers.
What does this mean?
Though China Dongxiang (Group)’s past data is helpful, it is only one aspect of my investment thesis. Companies are profitable, but have unpredictable earnings, can have many factors influencing its business. You should continue to research China Dongxiang (Group) to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 3818’s future growth? Take a look at our free research report of analyst consensus for 3818’s outlook.
2. Financial Health: Is 3818’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.
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 trailing twelve months from 30 June 2017. This may not be consistent with full year annual report figures.