Assessing Vestate Group Holdings Limited’s (SEHK:1386) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Vestate Group Holdings is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its luxury industry peers. Check out our latest analysis for Vestate Group Holdings
Commentary On 1386’s Past Performance
I look at 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 blend allows me to assess various companies on a similar basis, using new information. For Vestate Group Holdings, its most recent trailing-twelve-month earnings is -HK$247.77M, which, in comparison to the prior year’s level, has become more negative. Given that these figures are somewhat nearsighted, I’ve estimated an annualized five-year value for 1386’s net income, which stands at -HK$118.72M. 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 evaluate Vestate Group Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Vestate Group Holdings has seen an annual decline in revenue of -13.55%, 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 luxury industry has been growing, albeit, at a subdued single-digit rate of 3.04% over the past twelve months, . This is a turnaround from a volatile drop of -7.77% in the past couple of years. This means that whatever near-term the industry is facing, it’s hitting Vestate Group Holdings harder than its peers.
What does this mean?
Vestate Group Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will happen in the future and when. The most useful step is to assess company-specific issues Vestate Group Holdings may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Vestate Group Holdings to get a more holistic view of the stock by looking at:
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1. Financial Health: Is 1386’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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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 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.