In This Article:
Analyzing Metallurgical Corporation of China Ltd’s (SEHK:1618) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess 1618’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Metallurgical of China
Commentary On 1618’s Past Performance
I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to analyze many different companies on a more comparable basis, using the most relevant data points. For Metallurgical of China, its most recent bottom-line (trailing twelve month) is CN¥5.07B, which compared to last year’s figure, has risen by a relatively subdued 4.74%. Given that these figures may be relatively myopic, I’ve calculated an annualized five-year figure for Metallurgical of China’s net income, which stands at CN¥2.68B This suggests that, on average, Metallurgical of China has been able to steadily grow its bottom line over the last couple of years as well.
What’s the driver of this growth? Let’s see if it is only due to industry tailwinds, or if Metallurgical of China has seen some company-specific growth. Over the past few years, Metallurgical of China expanded bottom-line, while its top-line fell, by successfully managing its costs. This resulted in to a margin expansion and profitability over time. Inspecting growth from a sector-level, the HK construction industry has been enduring some headwinds over the past year, leading to average earnings dropping by more than half. This is a a strong change, given that the industry has been delivering a relatively flat growth rate over the past few years. This means whatever near-term headwind the industry is facing, Metallurgical of China is less exposed compared to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Metallurgical of China has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Metallurgical of China to get a more holistic view of the stock by looking at:
-
1. Future Outlook: What are well-informed industry analysts predicting for 1618’s future growth? Take a look at our free research report of analyst consensus for 1618’s outlook.
-
2. Financial Health: Is 1618’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.
-
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 September 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.