When China Cinda Asset Management Co Ltd (SEHK:1359) announced its most recent earnings (30 June 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how China Cinda Asset Management performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see 1359 has performed. Check out our latest analysis for China Cinda Asset Management
How Did 1359’s Recent Performance Stack Up Against Its Past?
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 allows me to analyze many different companies on a similar basis, using the latest information. For China Cinda Asset Management, its latest earnings (trailing twelve month) is CN¥16,385.7M, which, relative to the prior year’s figure, has climbed up by 15.29%. Given that these values may be somewhat short-term, I have determined an annualized five-year value for 1359’s net income, which stands at CN¥11,729.0M. This shows that, generally, China Cinda Asset Management has been able to gradually grow its bottom line over the past couple of years as well.
What’s the driver of this growth? Let’s see whether it is solely a result of an industry uplift, or if China Cinda Asset Management has experienced some company-specific growth. The climb in earnings seems to be driven by a strong top-line increase outpacing its growth rate of costs. Though this brought about a margin contraction, it has made China Cinda Asset Management more profitable. Scanning growth from a sector-level, the HK capital markets industry has been growing, albeit, at a unexciting single-digit rate of 4.46% over the prior twelve months, and a substantial 14.31% over the past five. This means that whatever recent headwind the industry is enduring, China Cinda Asset Management is less exposed compared to its peers.
What does this mean?
Though China Cinda Asset Management’s past data is helpful, it is only one aspect of my investment thesis. While China Cinda Asset Management has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research China Cinda Asset Management to get a better picture of the stock by looking at:
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1. Future Outlook: What are well-informed industry analysts predicting for 1359’s future growth? Take a look at our free research report of analyst consensus for 1359’s outlook.
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2. Financial Health: Is 1359’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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3. 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.