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For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Beijing Gas Blue Sky Holdings Limited (SGX:UQ7) useful as an attempt to give more color around how Beijing Gas Blue Sky Holdings is currently performing. View our latest analysis for Beijing Gas Blue Sky Holdings
Did UQ7 beat its long-term earnings growth trend and its industry?
I prefer to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to analyze various companies on a more comparable basis, using new information. For Beijing Gas Blue Sky Holdings, its most recent earnings (trailing twelve month) is HK$63.79M, which, against the prior year’s figure, has climbed up by a non-trivial 51.04%. Since these values are fairly nearsighted, I’ve determined an annualized five-year figure for UQ7’s earnings, which stands at -HK$5.98M This means that, generally, Beijing Gas Blue Sky Holdings has been able to consistently grow its profits over the past couple of years as well.
What’s the driver of this growth? Well, let’s take a look at whether it is solely due to industry tailwinds, or if Beijing Gas Blue Sky Holdings has seen some company-specific growth. The ascend in earnings seems to be propelled by a robust top-line increase beating its growth rate of costs. Though this brought about a margin contraction, it has made Beijing Gas Blue Sky Holdings more profitable. Inspecting growth from a sector-level, the SG gas utilities industry has been growing its average earnings by double-digit 27.67% in the past year, and a less exciting 8.77% over the past half a decade. This means that any uplift the industry is gaining from, Beijing Gas Blue Sky Holdings is capable of amplifying this to its advantage.
What does this mean?
Beijing Gas Blue Sky Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Beijing Gas Blue Sky Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Beijing Gas Blue Sky Holdings to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for UQ7’s future growth? Take a look at our free research report of analyst consensus for UQ7’s outlook.
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Financial Health: Is UQ7’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.
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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.
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.