Assessing AAC Technologies Holdings Inc’s (SEHK:2018) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how AAC Technologies Holdings is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its electronic industry peers. Check out our latest analysis for AAC Technologies Holdings
How 2018 fared against its long-term earnings performance and its industry
I use the ‘latest twelve-month’ data, 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 method allows me to analyze many different companies on a more comparable basis, using the latest information. “For AAC Technologies Holdings, its “, latest earnings is CN¥5,063.3M, which, relative to last year’s level, has increased by 46.10%. Since these values are fairly myopic, I’ve calculated an annualized five-year value for 2018’s net income, which stands at CN¥2,454.2M. This suggests that, generally, AAC Technologies Holdings has been able to gradually raise its earnings over the last few years as well.
What’s the driver of this growth? Well, let’s take a look at if it is solely attributable to an industry uplift, or if AAC Technologies Holdings has experienced some company-specific growth. The climb in earnings seems to be supported by a strong top-line increase overtaking its growth rate of expenses. Though this brought about a margin contraction, it has made AAC Technologies Holdings more profitable. Inspecting growth from a sector-level, the HK electronic industry has been growing its average earnings by double-digit 19.23% over the past year, and a less exciting 7.49% over the past five years. This means whatever tailwind the industry is enjoying, AAC Technologies Holdings is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research AAC Technologies Holdings to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 2018’s future growth? Take a look at our free research report of analyst consensus for 2018’s outlook.
2. Financial Health: Is 2018’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.