Interested In Wang Tai Holdings Limited (HKG:1400)? Here’s How It Performed Recently
After reading Wang Tai Holdings Limited’s (SEHK:1400) latest earnings update (31 December 2017), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. I also like to compare against an industry benchmark to understand whether 1400 has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways. Check out our latest analysis for Wang Tai Holdings
How Did 1400’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to assess various companies in a uniform manner using new information. For Wang Tai Holdings, its latest earnings (trailing twelve month) is -CN¥732.76M, which, relative to the previous year’s figure, has become more negative. Given that these values are somewhat myopic, I have computed an annualized five-year figure for 1400’s net income, which stands at -CN¥109.23M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further evaluate Wang Tai Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Wang Tai Holdings’s revenue growth has been somewhat subdued, with an annual growth rate of -0.42%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the HK luxury industry has been growing its average earnings by double-digit 13.18% in the past year, . This is a change from a volatile drop of -3.98% in the last few years. This suggests that any tailwind the industry is enjoying, Wang Tai Holdings has not been able to gain as much as its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to envisage what will occur going forward, and when. The most valuable step is to assess company-specific issues Wang Tai Holdings may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Wang Tai Holdings to get a more holistic view of the stock by looking at:
Financial Health: Is 1400’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 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.
