In This Article:
Examining how Sinopec Kantons Holdings Limited (SEHK:934) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Sinopec Kantons Holdings is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its oil and gas industry peers. See our latest analysis for Sinopec Kantons Holdings
Could 934 beat the long-term trend and outperform its industry?
For the purpose of this commentary, I like to 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 enables me to assess different stocks in a uniform manner using the most relevant data points. For Sinopec Kantons Holdings, its latest trailing-twelve-month earnings is HK$1.20B, which, in comparison to the prior year’s figure, has climbed up by 18.37%. Since these values may be somewhat nearsighted, I have calculated an annualized five-year value for Sinopec Kantons Holdings’s net income, which stands at HK$665.24M This means on average, Sinopec Kantons Holdings has been able to increasingly improve its bottom line over the last couple of years as well.
What’s the driver of this growth? Let’s take a look at if it is only a result of an industry uplift, or if Sinopec Kantons Holdings has seen some company-specific growth. Over the past couple of years, Sinopec Kantons Holdings expanded bottom-line, while its top-line declined, by effectively controlling its costs. This has led to to a margin expansion and profitability over time. Scanning growth from a sector-level, the HK oil and gas industry has been increasing average earnings growth of 52.06% in the past year, and a less exciting 5.21% over the previous five years. This shows that any tailwind the industry is enjoying, Sinopec Kantons Holdings has not been able to reap as much as its industry peers.
What does this mean?
Though Sinopec Kantons Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Sinopec Kantons Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Sinopec Kantons Holdings to get a better picture of the stock by looking at:
-
1. Future Outlook: What are well-informed industry analysts predicting for 934’s future growth? Take a look at our free research report of analyst consensus for 934’s outlook.
-
2. Financial Health: Is 934’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 June 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.