When Fy Financial (Shenzhen) Co Ltd (SEHK:8452) released its most recent earnings update (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Fy Financial (Shenzhen) has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see 8452 has performed. Check out our latest analysis for Fy Financial (Shenzhen)
Commentary On 8452’s Past Performance
For the most up-to-date info, I use 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 method allows me to analyze many different companies on a more comparable basis, using the most relevant data points. “For Fy Financial (Shenzhen), its “, most recent earnings is CN¥10.3M, which, in comparison to the previous year’s figure, has dropped by -24.98%. Since these values are fairly short-term, I have created an annualized five-year figure for Fy Financial (Shenzhen)’s earnings, which stands at CN¥9.1M. This suggests that even though earnings growth was negative against the prior year, over the past couple of years, Fy Financial (Shenzhen)’s earnings have been increasing on average.
How has it been able to do this? Let’s see if it is merely attributable to industry tailwinds, or if Fy Financial (Shenzhen) has experienced some company-specific growth. Over the past couple of years, Fy Financial (Shenzhen) increased its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Viewing growth from a sector-level, the HK diversified financial industry has been growing its average earnings by double-digit 15.63% in the previous twelve months, and a more muted 2.17% over the past five years. This shows that whatever uplift the industry is enjoying, Fy Financial (Shenzhen) has not been able to realize the gains unlike its average peer.
What does this mean?
Though Fy Financial (Shenzhen)’s past data is helpful, it is only one aspect of my investment thesis. Companies are profitable, but have volatile earnings, can have many factors affecting its business. I recommend you continue to research Fy Financial (Shenzhen) to get a more holistic view of the stock by looking at: