When abc Multiactive Limited (SEHK:8131) announced its most recent earnings (30 November 2017), 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 abc Multiactive 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 8131 has performed. Check out our latest analysis for abc Multiactive

Was 8131’s weak performance lately a part of a long-term decline?

For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to examine different companies on a similar basis, using the latest information. For abc Multiactive, its most recent trailing-twelve-month earnings is -HK$5.83M, which compared to the prior year’s figure, has become more negative. Since these figures may be somewhat nearsighted, I have created an annualized five-year value for 8131’s net income, which stands at -HK$4.85M. 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 evaluate abc Multiactive’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years abc Multiactive’s revenue growth has been somewhat unexciting, with an annual growth rate of 0.97%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Inspecting growth from a sector-level, the HK software industry has been growing, albeit, at a subdued single-digit rate of 8.89% in the prior twelve months, and a flatter 1.24% over the last five years. This means whatever tailwind the industry is profiting from, abc Multiactive has not been able to gain as much as its industry peers.

What does this mean?

abc Multiactive’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 forecast what will occur going forward, and when. The most useful step is to examine company-specific issues abc Multiactive may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research abc Multiactive to get a better picture of the stock by looking at: