When Peace Map Holding Limited (SEHK:402) released its most recent earnings update (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Peace Map Holding performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see 402 has performed. See our latest analysis for Peace Map Holding
Was 402 weak performance lately part of a long-term decline?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 blend enables me to assess different stocks in a uniform manner using the latest information. For Peace Map Holding, its latest trailing-twelve-month earnings is -HK$633.49M, which, against the previous year’s level, has become more negative. Since these figures may be somewhat short-term, I’ve estimated an annualized five-year value for Peace Map Holding’s earnings, which stands at -HK$564.10M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further analyze Peace Map Holding’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Peace Map Holding has seen an annual decline in revenue of -22.97%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the HK it industry has been growing, albeit, at a unexciting single-digit rate of 4.82% over the past year, and a flatter -0.15% over the past five. This shows that whatever near-term the industry is facing, it’s hitting Peace Map Holding harder than its peers.
What does this mean?
Peace Map Holding’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 forecast what will occur going forward, and when. The most useful step is to assess company-specific issues Peace Map Holding may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Peace Map Holding to get a better picture of the stock by looking at:
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1. Financial Health: Is 402’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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2. Valuation: What is 402 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 402 is currently mispriced by the market.
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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 31 December 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.