Measuring Azeus Systems Holdings Ltd’s (SGX:BBW) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess BBW’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. See our latest analysis for Azeus Systems Holdings

How Well Did BBW Perform?

For the purpose of this commentary, I like to use 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 method allows me to analyze different companies on a more comparable basis, using the most relevant data points. For Azeus Systems Holdings, its most recent earnings is -HK$17.5M, which, in comparison to the prior year’s level, has become more negative. Given that these figures are somewhat myopic, I’ve calculated an annualized five-year figure for Azeus Systems Holdings’s earnings, which stands at HK$6.7M.

We can further assess Azeus Systems Holdings’s loss by researching what’s going on in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over the past couple of years has been somewhat muted, remaining flat on average at 0.13%. Given that top-line growth is also pretty flat, the key to profitability moving forward would be controlling cost growth rates. Looking at growth from a sector-level, the SG it services industry has been growing its average earnings by double-digit 11.12% in the past twelve months, and 14.31% over the past five years. This shows that whatever uplift the industry is deriving benefit from, Azeus Systems Holdings has not been able to gain as much as its average peer.

What does this mean?

Azeus Systems Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to envisage what will happen in the future and when. The most useful step is to examine company-specific issues Azeus Systems Holdings may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Azeus Systems Holdings to get a more holistic view of the stock by looking at:

1. Financial Health: Is BBW’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 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.
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.