When OKP Holdings Limited (SGX:5CF) announced its most recent earnings (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well OKP Holdings has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see 5CF has performed. See our latest analysis for OKP Holdings
How Well Did 5CF Perform?
For the most up-to-date info, I 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 blend enables me to examine many different companies in a uniform manner using the latest information. For OKP Holdings, its most recent earnings (trailing twelve month) is SGD18.8M, which, in comparison to the previous year’s level, has escalated by over 100%. Since these values are somewhat short-term, I have calculated an annualized five-year value for OKP Holdings’s earnings, which stands at SGD12.0M. This suggests that, generally, OKP Holdings has been able to steadily grow its net income over the past couple of years as well.
What’s enabled this growth? Well, let’s take a look at whether it is solely a result of an industry uplift, or if OKP Holdings has experienced some company-specific growth. Though both top-line and bottom-line growth rates in the last couple of years, were, on average, negative, earnings were more so. While this has caused a margin contraction, it has softened OKP Holdings’s earnings contraction. Looking at growth from a sector-level, the SG construction industry has been enduring some headwinds over the last couple of years, leading to an average earnings drop of -8.11% in the most recent year. This shows that any near-term headwind the industry is enduring, OKP Holdings is relatively better-cushioned than its peers.
What does this mean?
Though OKP Holdings’s past data is helpful, it is only one aspect of my investment thesis. While OKP Holdings has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research OKP Holdings to get a better picture of the stock by looking at:
1. Financial Health: Is 5CF’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.