How Does SUNeVision Holdings Ltd’s (HKG:1686) Earnings Growth Stack Up Against Industry Performance?
After reading SUNeVision Holdings Ltd’s (SEHK:1686) most recent earnings announcement (31 December 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 SUNeVision Holdings’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. View our latest analysis for SUNeVision Holdings
Were 1686’s earnings stronger than its past performances and the industry?
For the purpose of this commentary, I like to use 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 technique enables me to examine various companies on a more comparable basis, using the latest information. For SUNeVision Holdings, its most recent earnings (trailing twelve month) is HK$752.31M, which compared to the previous year’s level, has jumped up by 31.48%. Given that these figures are somewhat nearsighted, I have determined an annualized five-year value for SUNeVision Holdings’s earnings, which stands at HK$548.67M This shows that, generally, SUNeVision Holdings has been able to consistently grow its earnings over the past few years as well.
What’s enabled this growth? Let’s see if it is solely a result of an industry uplift, or if SUNeVision Holdings has seen some company-specific growth. The ascend in earnings seems to be bolstered by a strong top-line increase beating its growth rate of expenses. Though this has led to a margin contraction, it has made SUNeVision Holdings more profitable. Inspecting growth from a sector-level, the HK internet industry has been growing its average earnings by double-digit 35.61% in the past twelve months, and 16.13% over the previous five years. This means any tailwind the industry is benefiting from, SUNeVision Holdings has not been able to reap as much as its average peer.
What does this mean?
SUNeVision Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While SUNeVision Holdings has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research SUNeVision Holdings to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 1686’s future growth? Take a look at our free research report of analyst consensus for 1686’s outlook.
2. Financial Health: Is 1686’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.
3. 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 31 December 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.
