In This Article:
When Sage International Group Limited (SEHK:8082) released its most recent earnings update (31 March 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Sage International Group has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see 8082 has performed. View our latest analysis for Sage International Group
Was 8082’s weak performance lately a part of a long-term decline?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, 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 blend enables me to analyze different companies on a more comparable basis, using the latest information. For Sage International Group, its most recent bottom-line (trailing twelve month) is -HK$18.69M, which, in comparison to last year’s level, has become more negative. Given that these values may be somewhat short-term, I have computed an annualized five-year value for 8082’s earnings, which stands at -HK$16.46M. This doesn’t seem to paint a better picture, as earnings seem to have steadily been getting more and more negative over time.
We can further analyze Sage International Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Sage International Group’s top-line has increased by 24.90% on average, implying that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Inspecting growth from a sector-level, the HK consumer services industry has been growing its average earnings by double-digit 35.16% in the past year, and 16.72% over the previous five years. This shows that any tailwind the industry is deriving benefit from, Sage International Group has not been able to realize the gains unlike its average peer.
What does this mean?
Sage International Group’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 valuable step is to examine company-specific issues Sage International Group may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Sage International Group to get a more holistic view of the stock by looking at: