Yahoo Finance Was HM International Holdings Limited’s (HKG:8416) Earnings Growth Better Than The Industry’s?
For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on HM International Holdings Limited (SEHK:8416) useful as an attempt to give more color around how HM International Holdings is currently performing. Check out our latest analysis for HM International Holdings
Were 8416’s earnings stronger than its past performances and the industry?
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to examine different stocks on a similar basis, using the most relevant data points. For HM International Holdings, its latest trailing-twelve-month earnings is HK$10.56M, which, in comparison to last year’s level, has risen by a relatively muted 5.14%. Since these figures may be somewhat nearsighted, I’ve estimated an annualized five-year value for HM International Holdings’s earnings, which stands at HK$11.36M This means that, even though earnings growth from last year was positive, over time, HM International Holdings’s earnings have been declining on average.
Why could this be happening? Well, let’s look at what’s occurring with margins and if the whole industry is facing the same headwind. Revenue growth in the last couple of years, has been positive, yet earnings growth has been declining. This means HM International Holdings has been increasing expenses, which is harming margins and earnings, and is not a sustainable practice. Viewing growth from a sector-level, the HK commercial services industry has been growing, albeit, at a muted single-digit rate of 2.58% over the previous year, and a substantial 11.90% over the past half a decade. This means that whatever near-term headwind the industry is facing, HM International Holdings is less exposed compared to its peers.
What does this mean?
Though HM International Holdings’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn’t always indicative of a continued optimistic outlook.
I suggest you continue to research HM International Holdings to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 8416’s future growth? Take a look at our free research report of analyst consensus for 8416’s outlook.
Financial Health: Is 8416’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.
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 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
