In this article, I will take a look at Milan Station Holdings Limited’s (SEHK:1150) most recent earnings update (30 June 2017) and compare these latest figures against its performance over the past few years, along with how the rest of 1150’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. Check out our latest analysis for Milan Station Holdings
Did 1150 beat its long-term earnings growth trend and its industry?
I like to 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 allows me to analyze many different companies on a similar basis, using the latest information. For Milan Station Holdings, its most recent twelve-month earnings is -HK$66.6M, which, against the prior year’s figure, has become less negative. Since these values may be relatively short-term, I have determined an annualized five-year figure for 1150’s earnings, which stands at -HK$22.2M. This means that, Milan Station Holdings has historically performed better than recently, although it seems like earnings are now heading back towards to right direction again.
Additionally, we can analyze Milan Station Holdings’s loss by looking at what has been happening in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over the past few years has been negative at -14.52%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Eyeballing growth from a sector-level, the HK specialty retail industry has been growing its average earnings by double-digit 18.14% over the prior year, . This is a turnaround from a volatile drop of -6.87% in the last couple of years. This shows that whatever uplift the industry is benefiting from, Milan Station Holdings has not been able to gain as much as its industry peers.
What does this mean?
Though Milan Station Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most insightful step is to assess company-specific issues Milan Station Holdings may be facing and whether management guidance has consistently been met in the past. You should continue to research Milan Station Holdings to get a better picture of the stock by looking at: