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For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine BaWang International (Group) Holding Limited’s (SEHK:1338) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. See our latest analysis for BaWang International (Group) Holding
How Did 1338’s Recent Performance Stack Up Against Its Past?
I look at 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 method allows me to examine various companies in a uniform manner using new information. For BaWang International (Group) Holding, its most recent earnings (trailing twelve month) is CN¥19.23M, which, in comparison to last year’s figure, has dropped by a large -56.01%. Since these figures are relatively short-term, I have calculated an annualized five-year value for BaWang International (Group) Holding’s net income, which stands at -CN¥231.93M This means that although earnings growth was negative against the prior year, in the long run, BaWang International (Group) Holding’s profits have been growing on average.
What’s the driver of this growth? Let’s see whether it is merely because of industry tailwinds, or if BaWang International (Group) Holding has experienced some company-specific growth. In the last few years, BaWang International (Group) Holding increased bottom-line, while its top-line declined, by successfully managing its costs. This has caused to a margin expansion and profitability over time. Inspecting growth from a sector-level, the HK personal products industry has been enduring severe headwinds over the previous couple of years, leading to an average earnings drop of -35.98% in the most recent year. This suggests that any headwind the industry is experiencing, it’s hitting BaWang International (Group) Holding harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. I suggest you continue to research BaWang International (Group) Holding to get a better picture of the stock by looking at:
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Financial Health: Is 1338’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.
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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 31 December 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.