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Assessing Global Sweeteners Holdings Limited’s (SEHK:3889) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 3889’s recent performance announced on 31 December 2017 and evaluate these figures to its longer term trend and industry movements. View our latest analysis for Global Sweeteners Holdings
Could 3889 beat the long-term trend and outperform its industry?
I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to assess various companies on a more comparable basis, using the latest information. For Global Sweeteners Holdings, its latest trailing-twelve-month earnings is -HK$140.26M, which, against the prior year’s figure, has become less negative. Given that these figures are relatively myopic, I’ve calculated an annualized five-year figure for 3889’s net income, which stands at -HK$369.38M. This suggests that, although net income is negative, it has become less negative over the years.
We can further evaluate Global Sweeteners Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Global Sweeteners Holdings has seen an annual decline in revenue of -22.55%, 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 food industry has been growing, albeit, at a unexciting single-digit rate of 6.43% over the previous year, and 4.15% over the past half a decade. This means that, although Global Sweeteners Holdings is currently running a loss, it may have been aided by industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Global Sweeteners Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most valuable step is to assess company-specific issues Global Sweeteners Holdings may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Global Sweeteners Holdings to get a more holistic view of the stock by looking at: