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Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Sun Art Retail Group Limited’s (SEHK:6808) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for Sun Art Retail Group
How 6808 fared against its long-term earnings performance and its industry
I look at the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to examine different companies in a uniform manner using the latest information. For Sun Art Retail Group, its most recent earnings (trailing twelve month) is CN¥2.90B, which, against the prior year’s level, has climbed up by 20.47%. Given that these values are relatively myopic, I’ve estimated an annualized five-year figure for Sun Art Retail Group’s earnings, which stands at CN¥2.39B This suggests that, generally, Sun Art Retail Group has been able to consistently raise its profits over the past couple of years as well.
What’s enabled this growth? Let’s see whether it is solely because of industry tailwinds, or if Sun Art Retail Group has seen some company-specific growth. Over the past few years, Sun Art Retail Group grew its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the HK consumer retailing industry has been enduring some headwinds over the previous couple of years, leading to an average earnings drop of -2.85% in the most recent year. This means any recent headwind the industry is experiencing, Sun Art Retail Group is less exposed compared to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Sun Art Retail Group 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 Sun Art Retail Group to get a more holistic view of the stock by looking at:
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1. Future Outlook: What are well-informed industry analysts predicting for 6808’s future growth? Take a look at our free research report of analyst consensus for 6808’s outlook.
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2. Financial Health: Is 6808’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.
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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.