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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 China Vanadium Titano-Magnetite Mining Company Limited (SEHK:893) useful as an attempt to give more color around how China Vanadium Titano-Magnetite Mining is currently performing. See our latest analysis for China Vanadium Titano-Magnetite Mining
Could 893 beat the long-term trend and outperform its industry?
For the purpose of this commentary, I like 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 analyze many different companies on a more comparable basis, using the latest information. For China Vanadium Titano-Magnetite Mining, its most recent trailing-twelve-month earnings is -CN¥349.49M, which, against the previous year’s figure, has become less negative. Since these values are somewhat short-term thinking, I’ve computed an annualized five-year value for China Vanadium Titano-Magnetite Mining’s net income, which stands at -CN¥168.29M. This means that, China Vanadium Titano-Magnetite Mining has historically performed better than recently, while it seems like earnings are now heading back towards to right direction again.
We can further evaluate China Vanadium Titano-Magnetite Mining’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years China Vanadium Titano-Magnetite Mining has seen an annual decline in revenue of -5.50%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the HK metals and mining industry has been multiplying average earnings growth of 53.96% in the past year, . This is a a substantial change from a volatile drop of -6.64% in the past couple of years. This means although China Vanadium Titano-Magnetite Mining is currently running a loss, it may have only just been aided by the recent industry expansion, moving earnings into a more favorable position.
What does this mean?
Though China Vanadium Titano-Magnetite Mining’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 happen in the future and when. The most insightful step is to assess company-specific issues China Vanadium Titano-Magnetite Mining may be facing and whether management guidance has consistently been met in the past. You should continue to research China Vanadium Titano-Magnetite Mining to get a more holistic view of the stock by looking at: