Assessing Junefield Department Store Group Limited’s (SEHK:758) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 758’s recent performance announced on 31 December 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for Junefield Department Store Group

Was 758’s recent earnings decline indicative of a tough track record?

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 method enables me to analyze various companies on a similar basis, using the most relevant data points. For Junefield Department Store Group, its latest earnings (trailing twelve month) is -HK$44.89M, which compared to the prior year’s level, has become more negative. Given that these values may be fairly short-term thinking, I’ve calculated an annualized five-year value for 758’s net income, which stands at HK$24.41M.

We can further examine Junefield Department Store Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Junefield Department Store Group has seen an annual decline in revenue of -7.65%, 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 basic materials industry has been amplifying growth, more than doubling average earnings in the prior twelve months, . This is a a solid change from a volatile drop of -17.88% in the previous couple of years. This shows that any tailwind the industry is profiting from, Junefield Department Store Group has not been able to reap as much as its industry peers.

What does this mean?

Though Junefield Department Store Group’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most useful step is to assess company-specific issues Junefield Department Store Group may be facing and whether management guidance has regularly been met in the past. You should continue to research Junefield Department Store Group to get a more holistic view of the stock by looking at: