After reading ANTA Sports Products Limited’s (SEHK:2020) latest earnings update (30 June 2017), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. I also like to compare against an industry benchmark to understand whether 2020 has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways. See our latest analysis for 2020
Commentary On 2020’s Past Performance
I look at 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 enables me to assess various companies on a more comparable basis, using the latest information. ANTA Sports Products’s latest twelve-month earnings is CN¥2,707.7M, which, relative to the previous year’s figure, has climbed up by 22.83%. Given that these figures are somewhat nearsighted, I have calculated an annualized five-year figure for ANTA Sports Products’s earnings, which stands at CN¥1,762.1M. This means generally, ANTA Sports Products has been able to consistently grow its profits over the past couple of years as well.
What’s the driver of this growth? Let’s take a look at if it is only because of an industry uplift, or if ANTA Sports Products has experienced some company-specific growth. The ascend in earnings seems to be bolstered by a strong top-line increase outstripping its growth rate of expenses. Though this resulted in a margin contraction, it has made ANTA Sports Products more profitable. Eyeballing growth from a sector-level, the HK luxury industry has been growing its average earnings by double-digit 43.31% over the prior year, . This is a turnaround from a volatile drop of -19.66% in the previous few years. This suggests that, in the recent industry expansion, ANTA Sports Products has not been able to reap as much as its average peer.
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 better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 2020’s future growth? Take a look at our free research report of analyst consensus for 2020’s outlook.