Assessing Ruixin International Holdings Limited’s (SEHK:724) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess 724’s latest performance announced on 30 June 2017 and evaluate these figures to its historical trend and industry movements. View our latest analysis for Ruixin International Holdings
Could 724 beat the long-term trend and outperform its industry?
I look at 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 allows me to analyze many different companies on a more comparable basis, using new information. For Ruixin International Holdings, its most recent trailing-twelve-month earnings is -HK$52.2M, which, relative to last year’s figure, has become less negative. Given that these figures are relatively nearsighted, I have determined an annualized five-year value for 724’s earnings, which stands at -HK$124.6M. This shows that, while net income is negative, it has become less negative over the years.
We can further assess Ruixin International Holdings’s loss by researching what has been happening in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over the past couple of years has been negative at -7.91%. The key to profitability here is to make sure the company’s cost growth is well-managed. Viewing growth from a sector-level, the HK semiconductors and semiconductor equipment industry has been growing its average earnings by double-digit 16.48% over the previous twelve months, and a more muted 6.51% over the past five years. This suggests that, while Ruixin International Holdings is presently running a loss, it may have gained from industry tailwinds, moving earnings towards to right direction.
What does this mean?
Ruixin International Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to envisage what will occur going forward, and when. The most insightful step is to examine company-specific issues Ruixin International Holdings may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Ruixin International Holdings to get a better picture of the stock by looking at: