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Examining Luxking Group Holdings Limited’s (SGX:BKK) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess BKK’s latest performance announced on 31 December 2017 and weigh these figures against its longer term trend and industry movements. See our latest analysis for Luxking Group Holdings
Could BKK beat the long-term trend and outperform its industry?
I look at the ‘latest twelve-month’ data, 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 method enables me to examine different stocks on a more comparable basis, using the most relevant data points. For Luxking Group Holdings, its latest trailing-twelve-month earnings is CN¥4.08M, which compared to last year’s level, has grown by a somewhat subdued 8.00%. Given that these values may be relatively short-term, I’ve determined an annualized five-year value for Luxking Group Holdings’s net income, which stands at CN¥5.02M This means though earnings growth from last year was positive, over the past couple of years, Luxking Group Holdings’s earnings have been deteriorating on average.
Why could this be happening? Well, let’s take a look at what’s occurring with margins and if the entire industry is facing the same headwind. Although revenue growth over the last few years, has been negative, earnings growth has been deteriorating by even more, suggesting that Luxking Group Holdings has been increasing its expenses. This harms margins and earnings, and is not a sustainable practice. Looking at growth from a sector-level, the SG commercial services industry has been growing, albeit, at a muted single-digit rate of 6.03% in the past year, and 4.17% over the past five. This means that any tailwind the industry is benefiting from, Luxking Group Holdings is capable of leveraging this to its advantage.
What does this mean?
Luxking Group Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There could be variables that are impacting the entire industry hence the high industry growth rate over the same time period. I suggest you continue to research Luxking Group Holdings to get a more holistic view of the stock by looking at: