Understanding how SEEC Media Group Limited (SEHK:205) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how SEEC Media Group is doing by comparing its latest earnings with its long-term trend as well as the performance of its media industry peers. Check out our latest analysis for SEEC Media Group

Did 205’s recent earnings growth beat the long-term trend and the industry?

For the most up-to-date info, 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 method enables me to analyze various companies on a similar basis, using new information. For SEEC Media Group, its most recent trailing-twelve-month earnings is -HK$197.32M, which, relative to last year’s figure, has become less negative. Given that these values are relatively myopic, I have estimated an annualized five-year figure for SEEC Media Group’s net income, which stands at -HK$48.63M. This shows that, SEEC Media Group has historically performed better than recently, even though it seems like earnings are now heading back in the right direction again.

We can further analyze SEEC Media Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years SEEC Media Group has seen an annual decline in revenue of -9.35%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the HK media industry has been relatively flat in terms of earnings growth . Thought this is a bit of a turnaround from a volatile drop of -15.73% in the previous few years. This means that while SEEC Media Group is presently unprofitable, any near-term headwind the industry is experiencing, SEEC Media Group is less exposed compared to its peers.

What does this mean?

While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will occur going forward, and when. The most insightful step is to examine company-specific issues SEEC Media Group may be facing and whether management guidance has dependably been met in the past. You should continue to research SEEC Media Group to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is 205’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.

• 2. 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 June 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.