Understanding how Dali Foods Group Company Limited (SEHK:3799) 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 Dali Foods Group is doing by comparing its latest earnings with its long-term trend as well as the performance of its food industry peers. Check out our latest analysis for Dali Foods Group
Did 3799 beat its long-term earnings growth trend and its industry?
I use the ‘latest twelve-month’ data, 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 technique enables me to assess different stocks in a uniform manner using the most relevant data points. Dali Foods Group’s most recent twelve-month earnings is CN¥3,250.0M, which, relative to last year’s level, has risen by a somewhat subdued 7.02%. Since these values may be somewhat nearsighted, I’ve calculated an annualized five-year value for Dali Foods Group’s earnings, which stands at CN¥2,548.8M. This suggests that, on average, Dali Foods Group has been able to steadily grow its net income over the last few years as well.
How has it been able to do this? Let’s take a look at whether it is only due to industry tailwinds, or if Dali Foods Group has seen some company-specific growth. Over the past few years, Dali Foods Group grew its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the HK food industry has been growing its average earnings by double-digit 10.76% in the previous year, and a less exciting 8.79% over the past five. This means whatever tailwind the industry is profiting from, Dali Foods Group has not been able to realize the gains unlike its industry peers.
What does this mean?
Dali Foods Group’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Dali Foods Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Dali Foods Group to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for 3799’s future growth? Take a look at our free research report of analyst consensus for 3799’s outlook.
2. Financial Health: Is 3799’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.