When Jujiang Construction Group Co Ltd (SEHK:1459) released its most recent earnings update (30 June 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Jujiang Construction Group’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not 1459 actually performed well. Below is a quick commentary on how I see 1459 has performed. Check out our latest analysis for Jujiang Construction Group
Commentary On 1459’s Past Performance
For the purpose of this commentary, 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 assess various companies on a more comparable basis, using the most relevant data points. “For Jujiang Construction Group, its “, most recent bottom-line is CN¥93.3M, which, in comparison to the previous year’s level, has fallen by -7.49%. Since these values are relatively short-term thinking, I’ve calculated an annualized five-year figure for 1459’s earnings, which stands at CN¥87.2M. This suggests that even though earnings declined from the prior year, over the past couple of years, Jujiang Construction Group’s profits have been increasing on average.
What’s enabled this growth? Well, let’s take a look at if it is merely owing to an industry uplift, or if Jujiang Construction Group has experienced some company-specific growth. In the past few years, Jujiang Construction Group grew its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Viewing growth from a sector-level, the HK construction and engineering industry has been enduring some headwinds over the prior year, leading to average earnings dropping by more than half. This is a a notable change, given that the industry has been delivering a relatively flat growth rate over the past couple of years. This suggests that whatever recent headwind the industry is enduring, it’s hitting Jujiang Construction Group harder than its peers.
What does this mean?
Though Jujiang Construction Group’s past data is helpful, it is only one aspect of my investment thesis. Companies are profitable, but have unpredictable earnings, can have many factors impacting its business. I suggest you continue to research Jujiang Construction Group to get a better picture of the stock by looking at: