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When U Banquet Group Holding Limited’s (SEHK:1483) announced its latest earnings (31 December 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were U Banquet Group Holding’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not 1483 actually performed well. Below is a quick commentary on how I see 1483 has performed. View our latest analysis for U Banquet Group Holding
Despite a decline, did 1483 underperform the long-term trend and the industry?
For the most up-to-date info, I use data from the most recent 12 months, 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 blend enables me to examine different companies in a uniform manner using the most relevant data points. For U Banquet Group Holding, its latest earnings (trailing twelve month) is -HK$56.19M, which compared to last year’s level, has become more negative. Given that these figures may be fairly nearsighted, I’ve computed an annualized five-year figure for 1483’s net income, which stands at -HK$12.76M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further analyze U Banquet Group Holding’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years U Banquet Group Holding’s top-line has grown by a mere 2.83%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the HK hospitality industry has been growing its average earnings by double-digit 22.95% in the prior year, . This is a turnaround from a volatile drop of -4.09% in the last few years. This means any uplift the industry is deriving benefit from, U Banquet Group Holding has not been able to realize the gains unlike its industry peers.
What does this mean?
U Banquet Group Holding’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 predict what will happen in the future and when. The most useful step is to examine company-specific issues U Banquet Group Holding may be facing and whether management guidance has consistently been met in the past. You should continue to research U Banquet Group Holding to get a better picture of the stock by looking at: