Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at China Mobile Limited’s (SEHK:941) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for China Mobile
How Did 941’s Recent Performance Stack Up Against Its Past?
I look at data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique allows me to examine many different companies in a uniform manner using new information. For China Mobile, its most recent earnings (trailing twelve month) is CN¥112.74B, which, in comparison to last year’s level, Since these values may be somewhat short-term thinking, I’ve created an annualized five-year value for 941’s earnings, which stands at CN¥117.66B This means that China Mobile’s average annual net income has historically been higher, which signifies a downward trend in profitability.
What could be happening here? Well, let’s take a look at what’s occurring with margins and whether the rest of the industry is experiencing the hit as well. Revenue growth over the past couple of years, has been positive, nevertheless earnings growth has been declining. This implies that China Mobile has been growing expenses, which is hurting margins and earnings, and is not a sustainable practice. Viewing growth from a sector-level, the HK wireless telcom industry has been growing, albeit, at a muted single-digit rate of 2.93% over the past twelve months, . This is a change from a volatile drop of -3.82% in the last few years. This shows that any headwind the industry is experiencing, it’s hitting China Mobile harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook.
I suggest you continue to research China Mobile to get a better picture of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
- 1. Future Outlook: What are well-informed industry analysts predicting for 941’s future growth? Take a look at this free research report of analyst consensus for 941’s outlook.
- 2. Financial Health: Is 941’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a 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.