When China Hanya Group Holdings Limited (SEHK:8312) released its most recent earnings update (31 December 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were China Hanya Group Holdings’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not 8312 actually performed well. Below is a quick commentary on how I see 8312 has performed. See our latest analysis for China Hanya Group Holdings
How Well Did 8312 Perform?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This allows me to assess many different companies in a uniform manner using the latest information. For China Hanya Group Holdings, its most recent trailing-twelve-month earnings is -HK$14.06M, which, against last year’s figure, has become less negative. Since these values may be fairly short-term thinking, I have computed an annualized five-year figure for China Hanya Group Holdings’s net income, which stands at -HK$7.25M. This means that, China Hanya Group Holdings has historically performed better than recently, despite the fact that it seems like earnings are now heading back in the right direction again.We can further analyze China Hanya Group Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years China Hanya Group Holdings has seen an annual decline in revenue of -27.75%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the HK retail distributors industry has been multiplying average earnings growth of 67.32% over the past twelve months, . This is a a strong change from a volatile drop of -9.39% in the last couple of years. This means whatever uplift the industry is enjoying, China Hanya Group Holdings has not been able to reap as much as its average peer.
What does this mean?
Though China Hanya Group Holdings’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to predict what will occur going forward, and when. The most useful step is to assess company-specific issues China Hanya Group Holdings may be facing and whether management guidance has steadily been met in the past. You should continue to research China Hanya Group Holdings to get a better picture of the stock by looking at:
- 1. Financial Health: Is 8312’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. 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.