After reading Sino Energy International Holdings Group Limited’s (SEHK:1096) most recent earnings announcement (30 June 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Sino Energy International Holdings Group’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. Check out our latest analysis for Sino Energy International Holdings Group
Was 1096’s recent earnings decline indicative of a tough track record?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to assess various companies on a similar basis, using the most relevant data points. For Sino Energy International Holdings Group, its most recent trailing-twelve-month earnings is -CN¥344.49M, which compared to last year’s level, has become more negative. Since these values are somewhat short-term thinking, I have created an annualized five-year figure for Sino Energy International Holdings Group’s earnings, which stands at -CN¥110.52M. This doesn’t seem to paint a better picture, as earnings seem to have gradually been getting more and more negative over time.
We can further examine Sino Energy International Holdings Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Sino Energy International Holdings Group has seen an annual decline in revenue of -13.85%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the HK luxury industry has been relatively flat in terms of earnings growth . Thought this is a bit of a change from a volatile drop of -7.43% in the past few years. This means any recent the industry is experiencing, it’s hitting Sino Energy International Holdings Group harder than its peers.
What does this mean?
Though Sino Energy International Holdings Group’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues Sino Energy International Holdings Group may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Sino Energy International Holdings Group to get a better picture of the stock by looking at: