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With 37.2% Earnings Growth Lately, Did SEEC Media Group Limited (SEHK:205) Outperform The Industry?

Examining SEEC Media Group Limited’s (SEHK:205) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 205’s latest performance announced on 30 June 2017 and compare these figures to its longer term trend and industry movements. View our latest analysis for SEEC Media Group

Were 205’s earnings stronger than its past performances and the industry?

For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, 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 more comparable basis, using the most relevant data points. For SEEC Media Group, the most recent earnings -HK$197.3M, which, in comparison to the prior year’s figure, has become less negative. Given that these values may be somewhat myopic, I have computed an annualized five-year figure for 205’s earnings, which stands at -HK$46.2M. This suggests that, SEEC Media Group has historically performed better than recently, even though it seems like earnings are now heading back towards a more favorable position once more.

SEHK:205 Income Statement Dec 12th 17
SEHK:205 Income Statement Dec 12th 17

Additionally, we can analyze SEEC Media Group’s loss by researching what’s going on in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over last couple of years has been negative at -7.94%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Inspecting 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 change from a volatile drop of -17.96% in the past few years. This means any recent headwind the industry is enduring, the impact on SEEC Media Group has been softer relative to its peers.

What does this mean?

SEEC Media Group’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 envisage what will happen in the future and when. The most valuable step is to examine company-specific issues SEEC Media Group may be facing and whether management guidance has consistently been met in the past. I recommend you 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.

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