In This Article:
Examining Sanroc International Holdings Limited’s (SEHK:1660) 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 1660’s latest performance announced on 30 September 2017 and compare these figures to its longer term trend and industry movements. See our latest analysis for Sanroc International Holdings
How Well Did 1660 Perform?
I 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 method enables me to examine various companies on a more comparable basis, using new information. For Sanroc International Holdings, its latest trailing-twelve-month earnings is HK$19.70M, which, relative to last year’s figure, has declined by -21.39%. Since these figures are relatively short-term, I have calculated an annualized five-year figure for Sanroc International Holdings’s earnings, which stands at HK$21.72M This doesn’t look much better, as earnings seem to have gradually been falling over time.
Why is this? Let’s examine what’s going on with margins and whether the whole industry is feeling the heat. Revenue growth in the past few years, has been positive, yet earnings growth has been deteriorating. This means Sanroc International Holdings has been increasing expenses, which is harming margins and earnings, and is not a sustainable practice. Scanning growth from a sector-level, the HK trade distributors industry has been growing its average earnings by double-digit 20.53% over the previous twelve months, and 15.50% over the previous five years. This suggests that whatever tailwind the industry is benefiting from, Sanroc International Holdings has not been able to realize the gains unlike its average peer.
What does this mean?
Sanroc International Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Typically companies that endure a prolonged period of decline in earnings are undergoing some sort of reinvestment phase in order to keep up with the latest industry disruption and growth. I suggest you continue to research Sanroc International Holdings to get a better picture of the stock by looking at:
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Financial Health: Is 1660’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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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 September 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.