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In this article, I will take a look at ANTA Sports Products Limited’s (SEHK:2020) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, along with how the rest of 2020’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. Check out our latest analysis for ANTA Sports Products
Could 2020 beat the long-term trend and outperform its industry?
To account for any quarterly or half-yearly updates, I 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 technique allows me to analyze different stocks in a uniform manner using the most relevant data points. For ANTA Sports Products, its most recent bottom-line (trailing twelve month) is CN¥3.09B, which, against last year’s figure, has increased by 29.44%. Given that these values may be fairly short-term, I’ve computed an annualized five-year value for ANTA Sports Products’s net income, which stands at CN¥1.86B This shows that, generally, ANTA Sports Products has been able to steadily raise its profits over the last few years as well.
What’s enabled this growth? Well, let’s take a look at whether it is merely a result of an industry uplift, or if ANTA Sports Products has seen some company-specific growth. The hike in earnings seems to be supported by a strong top-line increase overtaking its growth rate of costs. Though this brought about a margin contraction, it has made ANTA Sports Products more profitable. Inspecting growth from a sector-level, the HK luxury industry has been growing, albeit, at a unexciting single-digit rate of 8.84% over the prior twelve months, . This is a change from a volatile drop of -8.30% in the previous couple of years. This shows that, in the recent industry expansion, ANTA Sports Products is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as ANTA Sports Products gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research ANTA Sports Products to get a more holistic view of the stock by looking at: