Measuring Zhejiang United Investment Holdings Group Limited’s (SEHK:8366) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 8366’s recent performance announced on 31 October 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Zhejiang United Investment Holdings Group
Was 8366’s recent earnings decline worse than the long-term trend and the industry?
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine different stocks on a more comparable basis, using the most relevant data points. For Zhejiang United Investment Holdings Group, its most recent bottom-line is -HK$1.3M, which, in comparison to the previous year’s level, has turned from positive to negative. Given that these figures are fairly short-term thinking, I have computed an annualized five-year figure for Zhejiang United Investment Holdings Group’s net income, which stands at HK$7.1M.
We can further analyze Zhejiang United Investment Holdings Group’s loss by researching what’s going on in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over the past few years has been negative at -2.48%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Scanning growth from a sector-level, the HK construction and engineering industry has been enduring some headwinds over the previous year, leading to average earnings dropping by more than half. This is a a solid change, given that the industry has been delivering a relatively flat growth rate over the previous few years. This suggests that any near-term headwind the industry is facing, it’s hitting Zhejiang United Investment Holdings Group harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. 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 assess company-specific issues Zhejiang United Investment Holdings Group may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Zhejiang United Investment Holdings Group to get a better picture of the stock by looking at: