Understanding how Imperium Group Global Holdings Limited (SEHK:776) 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 Imperium Group Global Holdings is doing by comparing its latest earnings with its long-term trend as well as the performance of its consumer durables industry peers. Check out our latest analysis for Imperium Group Global Holdings
Was 776 weak performance lately part of a long-term decline?
I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to analyze different companies on a more comparable basis, using the most relevant data points. For Imperium Group Global Holdings, its most recent earnings is -HK$17.6M, which, in comparison to last year’s figure, has become more negative. Given that these figures may be relatively short-term thinking, I have determined an annualized five-year figure for Imperium Group Global Holdings’s earnings, which stands at -HK$10.1M. This doesn’t look much better, since earnings seem to have steadily been getting more and more negative over time.
Additionally, we can analyze Imperium Group Global Holdings’s loss by researching what’s going on in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over the past couple of years has been negative at -12.67%. The key to profitability here is to make sure the company’s cost growth is well-managed. Scanning growth from a sector-level, the HK consumer durables industry has been growing its average earnings by double-digit 12.74% in the past twelve months, and 13.77% over the past couple of years. This means any tailwind the industry is deriving benefit from, Imperium Group Global Holdings has not been able to reap as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Imperium Group Global Holdings may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Imperium Group Global Holdings to get a better picture of the stock by looking at:
1. Financial Health: Is 776’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.