When Dragon Group International Limited’s (SGX:MT1) announced its latest earnings (30 September 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Dragon Group International’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not MT1 actually performed well. Below is a quick commentary on how I see MT1 has performed. View our latest analysis for Dragon Group International
Were MT1’s earnings stronger than its past performances and the industry?
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to assess different stocks on a similar basis, using the most relevant data points. Dragon Group International’s most recent earnings -$4.6M, which, in comparison to last year’s level, has become less negative. Given that these values are fairly myopic, I have calculated an annualized five-year figure for MT1’s net income, which stands at -$5.2M. This means that, though net income is negative, it has become less negative over the years.
Additionally, we can evaluate Dragon Group International’s loss by researching what has been happening in the industry on top of within the company. First, I want to quickly look into the line items. Revenue growth over the past couple of years has been negative at -38.06%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Looking at growth from a sector-level, the SG electronic industry has been growing its average earnings by double-digit 21.81% in the prior year, and a flatter 0.54% over the past five. This means despite the fact that Dragon Group International is presently loss-making, it may have been aided by industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Dragon Group International’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 occur going forward, and when. The most useful step is to examine company-specific issues Dragon Group International may be facing and whether management guidance has regularly been met in the past. You should continue to research Dragon Group International to get a better picture of the stock by looking at: