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Measuring Energy International Investments Holdings Limited’s (SEHK:353) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess 353’s recent performance announced on 31 December 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Energy International Investments Holdings
How 353 fared against its long-term earnings performance and its industry
For the purpose of this commentary, I like to use data from the most recent 12 months, 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 examine many different companies on a similar basis, using the most relevant data points. For Energy International Investments Holdings, its latest earnings (trailing twelve month) is -HK$178.06M, which, in comparison to the previous year’s level, has become less negative. Given that these figures are relatively short-term thinking, I’ve computed an annualized five-year value for 353’s net income, which stands at -HK$311.24M. This suggests that, although net income is negative, it has become less negative over the years.
We can further examine Energy International Investments Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Energy International Investments Holdings has seen an annual decline in revenue of -26.20%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the HK oil and gas industry has been growing its average earnings by double-digit 20.17% in the previous year, and a more subdued 4.97% over the previous five years. This means that any tailwind the industry is enjoying, Energy International Investments Holdings has not been able to gain as much as its industry peers.
What does this mean?
Energy International Investments Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most useful step is to examine company-specific issues Energy International Investments Holdings may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Energy International Investments Holdings to get a more holistic view of the stock by looking at: