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Examining how Comtec Solar Systems Group Limited (SEHK:712) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Comtec Solar Systems Group is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its semiconductor industry peers. View our latest analysis for Comtec Solar Systems Group
Did 712’s recent earnings growth beat the long-term trend and the industry?
I look at the ‘latest twelve-month’ data, 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 blend allows me to analyze different stocks in a uniform manner using the latest information. For Comtec Solar Systems Group, its latest earnings (trailing twelve month) is -CN¥140.30M, which, against the previous year’s level, has become less negative. Since these figures may be relatively myopic, I have created an annualized five-year figure for 712’s net income, which stands at -CN¥278.48M. This suggests that, even though net income is negative, it has become less negative over the years.
We can further evaluate Comtec Solar Systems Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Comtec Solar Systems Group has seen an annual decline in revenue of -5.93%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the HK semiconductor industry has been relatively flat in terms of earnings growth over the previous couple of years. This shows that although Comtec Solar Systems Group is currently running a loss, any recent headwind the industry is experiencing, Comtec Solar Systems Group is relatively better-cushioned than its peers.
What does this mean?
Though Comtec Solar Systems Group’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most useful step is to assess company-specific issues Comtec Solar Systems Group may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Comtec Solar Systems Group to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for 712’s future growth? Take a look at our free research report of analyst consensus for 712’s outlook.
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Financial Health: Is 712’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.