In This Article:
Analyzing Bolina Holding Co Ltd.’s (SEHK:1190) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess 1190’s recent performance announced on 31 December 2017 and compare these figures to its long-term trend and industry movements. See our latest analysis for Bolina Holding
Was 1190’s weak performance lately a part of a long-term decline?
I prefer to 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 method enables me to examine many different companies on a similar basis, using the most relevant data points. For Bolina Holding, its most recent trailing-twelve-month earnings is -CN¥412.28M, which, in comparison to the previous year’s level, has become more negative. Given that these values are somewhat short-term thinking, I’ve calculated an annualized five-year figure for 1190’s earnings, which stands at CN¥43.07M.
We can further evaluate Bolina Holding’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Bolina Holding has seen an annual decline in revenue of -11.10%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the HK building industry has been ramping up average earnings growth of 78.11% in the previous year, . This is a a strong change from a volatile drop of -10.13% in the last few years. This means whatever tailwind the industry is deriving benefit from, Bolina Holding has not been able to reap as much as its average peer.
What does this mean?
Though Bolina Holding’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will occur going forward, and when. The most valuable step is to assess company-specific issues Bolina Holding may be facing and whether management guidance has steadily been met in the past. You should continue to research Bolina Holding to get a more holistic view of the stock by looking at:
-
1. Financial Health: Is 1190’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.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. 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.