After reading Orient Securities International Holdings Limited’s (SEHK:8001) most recent earnings announcement (31 March 2018), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Orient Securities International Holdings’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. Check out our latest analysis for Orient Securities International Holdings
How 8001 fared against its long-term earnings performance and its industry
I prefer to 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 analyze different stocks in a uniform manner using the most relevant data points. For Orient Securities International Holdings, its most recent bottom-line (trailing twelve month) is -HK$328.00K, which compared to last year’s level, has become less negative. Given that these figures are fairly short-term thinking, I have computed an annualized five-year figure for Orient Securities International Holdings’s earnings, which stands at HK$10.74M.
We can further analyze Orient Securities International Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Orient Securities International Holdings has seen an annual decline in revenue of -4.08%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the HK capital markets industry has been growing its average earnings by double-digit 15.10% over the previous year, and 16.10% over the past half a decade. This means despite the fact that Orient Securities International Holdings is currently unprofitable, it may have gained from industry tailwinds, moving earnings towards to right direction.
What does this mean?
Orient Securities International Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Orient Securities International Holdings may be facing and whether management guidance has regularly been met in the past. You should continue to research Orient Securities International Holdings to get a better picture of the stock by looking at: