Where Emperor Culture Group Limited (SEHK:491) Stands In Terms Of Earnings Growth Against Its Industry
Understanding Emperor Culture Group Limited’s (SEHK:491) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Emperor Culture Group is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. See our latest analysis for 491
Commentary On 491’s Past Performance
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 analyze different companies on a similar basis, using the latest information. Emperor Culture Group’s most recent twelve-month earnings -HK$62.3M, which, relative to the prior year’s level, has become less negative. Given that these values may be relatively short-term, I have created an annualized five-year figure for 491’s earnings, which stands at -HK$40.1M. This shows that, Emperor Culture Group has historically performed better than recently, although it seems like earnings are now heading back towards a more favorable position once more.
Additionally, we can examine Emperor Culture Group’s loss by looking at what’s going on in the industry along with within the company. Firstly, I want to quickly look into the line items. Revenue growth over last few years has increased by a mere 9.45%. Given that top-line growth is also pretty flat, the key to profitability going forward would be managing cost growth rates. Viewing 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 couple of years. This means that whatever recent headwind the industry is enduring, Emperor Culture Group is less exposed compared to its peers.
What does this mean?
Though Emperor Culture Group’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will occur going forward, and when. The most useful step is to examine company-specific issues Emperor Culture Group may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Emperor Culture Group to get a better picture of the stock by looking at:
1. Financial Health: Is 491’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.
