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For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on CBANNER INTERNATIONAL Holdings Limited (SEHK:1028) useful as an attempt to give more color around how C.BANNER INTERNATIONAL Holdings is currently performing. Check out our latest analysis for C.BANNER INTERNATIONAL Holdings
Was 1028’s recent earnings decline worse than the long-term trend and the industry?
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 enables me to assess different companies in a uniform manner using new information. For C.BANNER INTERNATIONAL Holdings, its latest earnings (trailing twelve month) is CN¥20.49M, which, against the prior year’s figure, has taken a dive by a large -90.07%. Since these values may be fairly nearsighted, I have estimated an annualized five-year value for C.BANNER INTERNATIONAL Holdings’s earnings, which stands at CN¥236.06M This doesn’t seem to paint a better picture, since earnings seem to have steadily been diminishing over the longer term.
Why could this be happening? Well, let’s look at what’s going on with margins and if the entire industry is feeling the heat. Revenue growth in the past few years, has been positive, nevertheless earnings growth has been declining. This suggest that C.BANNER INTERNATIONAL Holdings has been ramping up expenses, which is harming margins and earnings, and is not a sustainable practice. Looking at growth from a sector-level, the HK luxury industry has been growing its average earnings by double-digit 12.71% in the previous year, . This is a change from a volatile drop of -8.39% in the past couple of years. This shows that, in the recent industry expansion, C.BANNER INTERNATIONAL Holdings has not been able to gain as much as its industry peers.
What does this mean?
C.BANNER INTERNATIONAL Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Typically companies that face an extended period of diminishing earnings are going through some sort of reinvestment phase with the aim of keeping up with the latest industry growth and disruption. I suggest you continue to research C.BANNER INTERNATIONAL Holdings to get a better picture of the stock by looking at: