For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Yu Tak International Holdings Limited’s (SEHK:8048) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. View our latest analysis for Yu Tak International Holdings
Did 8048’s recent earnings growth beat the long-term trend 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 technique allows me to examine various companies on a more comparable basis, using the latest information. For Yu Tak International Holdings, its most recent earnings is -HK$10.1M, which, relative to the prior year’s level, has become less negative. Since these figures are somewhat short-term thinking, I have determined an annualized five-year value for Yu Tak International Holdings’s earnings, which stands at -HK$9.6M. This means that, Yu Tak International Holdings has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards a more favorable position once more.
We can further evaluate Yu Tak International Holdings’s loss by looking at what has been happening in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over the last few years has been negative at -13.69%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Viewing growth from a sector-level, the HK software industry has been growing, albeit, at a subdued single-digit rate of 8.89% over the prior twelve months, and 6.98% over the previous few years. This means that, despite the fact that Yu Tak International Holdings is currently unprofitable, it may have been aided by industry tailwinds, moving earnings into a more favorable position.
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 forecast what will occur going forward, and when. The most useful step is to examine company-specific issues Yu Tak International Holdings may be facing and whether management guidance has consistently been met in the past. You should continue to research Yu Tak International Holdings to get a better picture of the stock by looking at: