When Yangtze Optical Fibre And Cable Joint Stock Limited Company’s (SEHK:6869) announced its latest earnings (30 June 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Yangtze Optical Fibre And Cable Joint Stock Limited’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not 6869 actually performed well. Below is a quick commentary on how I see 6869 has performed. View our latest analysis for Yangtze Optical Fibre And Cable Joint Stock Limited
Commentary On 6869’s Past Performance
I like to use 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 enables me to assess different companies on a more comparable basis, using the latest information. For Yangtze Optical Fibre And Cable Joint Stock Limited, the most recent bottom-line is CN¥912.0M, which, in comparison to last year’s figure, has climbed up by 46.97%. Since these figures may be relatively nearsighted, I’ve calculated an annualized five-year value for 6869’s earnings, which stands at CN¥551.4M. This shows that, generally, Yangtze Optical Fibre And Cable Joint Stock Limited has been able to increasingly raise its earnings over the last couple of years as well.
What’s the driver of this growth? Let’s take a look at if it is merely attributable to industry tailwinds, or if Yangtze Optical Fibre And Cable Joint Stock Limited has experienced some company-specific growth. Over the past few years, Yangtze Optical Fibre And Cable Joint Stock Limited increased its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Viewing growth from a sector-level, the HK communications industry has been growing its average earnings by double-digit 24.42% over the past year, and a flatter -0.32% over the past five. This shows that, in the recent industry expansion, Yangtze Optical Fibre And Cable Joint Stock Limited is capable of leveraging this to its advantage.
What does this mean?
Though Yangtze Optical Fibre And Cable Joint Stock Limited’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Yangtze Optical Fibre And Cable Joint Stock Limited to get a more holistic view of the stock by looking at: