In This Article:
When Want Want China Holdings Limited (SEHK:151) announced its most recent earnings (30 September 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 Want Want China Holdings 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 151 has performed. View our latest analysis for Want Want China Holdings
Did 151 perform better than its track record and industry?
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 blend allows me to analyze various companies on a more comparable basis, using the latest information. For Want Want China Holdings, its most recent bottom-line (trailing twelve month) is CN¥3.20B, which, against the previous year’s level, Given that these figures are relatively myopic, I have computed an annualized five-year value for Want Want China Holdings’s net income, which stands at CN¥3.46B This means that Want Want China Holdings’s average annual net income has traditionally been higher, which implies a falling trend in profitability.
To understand what’s happening, let’s look at what’s occurring with margins and if the entire industry is facing the same headwind. Over the past couple of years, revenue growth has failed to keep up which indicates that Want Want China Holdings’s bottom line has been propelled by unmaintainable cost-cutting. Scanning growth from a sector-level, the HK food industry has been relatively flat in terms of earnings growth over the previous few years. This means that any recent headwind the industry is experiencing, Want Want China Holdings is less exposed compared to its peers.
What does this mean?
Though Want Want China Holdings’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn’t always indicative of a continued optimistic outlook.
You should continue to research Want Want China Holdings to get a more holistic view of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for 151’s future growth? Take a look at our free research report of analyst consensus for 151’s outlook.
-
Financial Health: Is 151’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.
-
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.