Measuring China Primary Energy Holdings Limited’s (SEHK:8117) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess 8117’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for China Primary Energy Holdings
Were 8117’s earnings stronger than its past performances and the industry?
To account for any quarterly or half-yearly updates, I use 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 enables me to assess different companies on a more comparable basis, using new information. For China Primary Energy Holdings, the most recent twelve-month earnings -HK$49.4M, which, in comparison to the prior year’s figure, has become less negative. Given that these values may be fairly short-term, I have calculated an annualized five-year figure for 8117’s earnings, which stands at -HK$58.2M. This suggests that, although net income is negative, it has become less negative over the years.
We can further evaluate China Primary Energy Holdings’s loss by looking at what has been happening in the industry along with within the company. Initially, I want to briefly look into the line items. Revenue growth over past couple of years has increased by 14.07%, indicating that China Primary Energy Holdings is in a high-growth period with expenses shooting ahead of elevated top-line growth rates. Inspecting growth from a sector-level, the HK gas utilities industry has been growing, albeit, at a unexciting single-digit rate of 3.87% in the prior year, and 7.82% over the previous five years. This means any near-term headwind the industry is facing, the impact on China Primary Energy Holdings has been softer relative to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to envisage what will occur going forward, and when. The most useful step is to examine company-specific issues China Primary Energy Holdings may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research China Primary Energy Holdings to get a better picture of the stock by looking at: