For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Perfect Shape Beauty Technology Limited (SEHK:1830) useful as an attempt to give more color around how Perfect Shape Beauty Technology is currently performing. View our latest analysis for Perfect Shape Beauty Technology
Commentary On 1830’s Past Performance
To account for any quarterly or half-yearly updates, 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 blend enables me to assess various companies in a uniform manner using new information. For Perfect Shape Beauty Technology, the latest twelve-month earnings is HK$135.2M, which, relative to last year’s level, has increased by 45.41%. Given that these figures are relatively myopic, I have calculated an annualized five-year value for Perfect Shape Beauty Technology’s earnings, which stands at HK$99.5M. This means generally, Perfect Shape Beauty Technology has been able to increasingly raise its net income over the last few years as well.
What’s enabled this growth? Let’s see if it is solely because of an industry uplift, or if Perfect Shape Beauty Technology has experienced some company-specific growth. The ascend in earnings seems to be supported by a strong top-line increase outstripping its growth rate of costs. Though this brought about a margin contraction, it has made Perfect Shape Beauty Technology more profitable. Eyeballing growth from a sector-level, the HK consumer services industry has been growing its average earnings by double-digit 29.85% over the prior twelve months, . This is a change from a volatile drop of -11.55% in the past few years. This shows that, in the recent industry expansion, Perfect Shape Beauty Technology is able to leverage this to its advantage.
What does this mean?
Though Perfect Shape Beauty Technology’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Perfect Shape Beauty Technology to get a more holistic view of the stock by looking at:
1. Financial Health: Is 1830’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.