Understanding how Aurum Pacific (China) Group Limited (SEHK:8148) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Aurum Pacific (China) Group is doing by comparing its latest earnings with its long-term trend as well as the performance of its software industry peers. View our latest analysis for Aurum Pacific (China) Group
Commentary On 8148’s Past Performance
For the purpose of this commentary, 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 method enables me to assess different companies on a more comparable basis, using the most relevant data points. For Aurum Pacific (China) Group, the most recent twelve-month earnings -HK$33.2M, which, against the previous year’s figure, has become more negative. Given that these figures may be relatively short-term, I have calculated an annualized five-year value for 8148’s earnings, which stands at -HK$11.0M. This doesn’t look much better, since earnings seem to have steadily been getting more and more negative over time.
Additionally, we can examine Aurum Pacific (China) Group’s loss by researching what’s going on in the industry on top of within the company. Initially, I want to quickly look into the line items. Revenue growth over past couple of years has increased by 43.66%, signalling that Aurum Pacific (China) Group is in a high-growth period with expenses shooting ahead of elevated top-line growth rates. Scanning growth from a sector-level, the HK software industry has been growing, albeit, at a unexciting single-digit rate of 8.89% in the prior year, and 6.98% over the previous few years. This means whatever tailwind the industry is enjoying, Aurum Pacific (China) Group has not been able to gain as much as its average peer.
What does this mean?
Aurum Pacific (China) Group’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will happen in the future and when. The most useful step is to examine company-specific issues Aurum Pacific (China) Group may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Aurum Pacific (China) Group to get a better picture of the stock by looking at: