Where Brilliance China Automotive Holdings Limited (HKG:1114) Stands In Terms Of Earnings Growth Against Its Industry
Measuring Brilliance China Automotive Holdings Limited’s (SEHK:1114) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess 1114’s recent performance announced on 30 June 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Brilliance China Automotive Holdings
Could 1114 beat the long-term trend and outperform its industry?
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 blend allows me to assess many different companies on a similar basis, using new information. For Brilliance China Automotive Holdings, its latest trailing-twelve-month earnings is CN¥4.19B, which compared to the previous year’s level, has risen by 23.76%. Given that these values are somewhat myopic, I have calculated an annualized five-year value for 1114’s earnings, which stands at CN¥3.27B This suggests that, on average, Brilliance China Automotive Holdings has been able to consistently raise its net income over the past couple of years as well.
How has it been able to do this? Let’s take a look at if it is merely owing to industry tailwinds, or if Brilliance China Automotive Holdings has experienced some company-specific growth. Over the past couple of years, Brilliance China Automotive Holdings increased bottom-line, while its top-line declined, by efficiently controlling its costs. This brought about to a margin expansion and profitability over time. Viewing growth from a sector-level, the HK auto industry has been growing its average earnings by double-digit 19.47% in the past twelve months, and 12.17% over the previous five years. This means that any tailwind the industry is enjoying, Brilliance China Automotive Holdings is able to leverage this to its advantage.
What does this mean?
Though Brilliance China Automotive Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Brilliance China Automotive Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Brilliance China Automotive Holdings to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 1114’s future growth? Take a look at our free research report of analyst consensus for 1114’s outlook.
2. Financial Health: Is 1114’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 30 June 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.
