Understanding how Haw Par Corporation Limited (SGX:H02) 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 Haw Par is doing by comparing its latest earnings with its long-term trend as well as the performance of its pharmaceuticals industry peers. View our latest analysis for Haw Par
Were H02’s earnings stronger than its past performances and the industry?
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 allows me to examine many different companies on a similar basis, using the most relevant data points. Haw Par’s most recent twelve-month earnings is SGD129.8M, which compared to last year’s figure, has increased by a fairly subdued 4.76%. Since these figures are fairly myopic, I’ve determined an annualized five-year figure for H02’s net income, which stands at SGD122.8M. This shows that, generally, Haw Par has been able to increasingly improve its bottom line over the past couple of years as well.
What’s enabled this growth? Let’s take a look at if it is merely because of industry tailwinds, or if Haw Par has experienced some company-specific growth. The hike in earnings seems to be propelled by a solid top-line increase overtaking its growth rate of expenses. Though this brought about a margin contraction, it has made Haw Par more profitable. Scanning growth from a sector-level, the SG pharmaceuticals industry has been growing, albeit, at a muted single-digit rate of 9.47% over the past year, and a substantial 12.65% over the previous five years. This suggests that any uplift the industry is deriving benefit from, Haw Par has not been able to realize the gains unlike its average peer.
What does this mean?
Haw Par’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 Haw Par gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Haw Par to get a more holistic view of the stock by looking at:
1. Financial Health: Is H02’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.
2. Valuation: What is H02 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether H02 is currently mispriced by the market.