Measuring Tat Hong Holdings Ltd’s (SGX:T03) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess T03’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for Tat Hong Holdings
How Did T03’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like to 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 enables me to examine different companies on a more comparable basis, using new information. For Tat Hong Holdings, its latest earnings (trailing twelve month) is -SGD36.9M, which compared to last year’s figure, has become less negative. Given that these figures may be somewhat short-term thinking, I’ve calculated an annualized five-year figure for Tat Hong Holdings’s earnings, which stands at SGD13.4M.
We can further evaluate Tat Hong Holdings’s loss by researching what has been happening in the industry as well as within the company. Firstly, I want to briefly look into the line items. Revenue growth over the past few years has been negative at -6.96%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Viewing growth from a sector-level, the SG trade distributors industry has been growing, albeit, at a subdued single-digit rate of 8.95% over the past twelve months, . This is a change from a volatile drop of -4.85% in the past few years. This means although Tat Hong Holdings is presently running a loss, it may have only just gained from the recent industry expansion, moving earnings towards to right direction.
What does this mean?
Tat Hong Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most useful step is to assess company-specific issues Tat Hong Holdings may be facing and whether management guidance has dependably been met in the past. You should continue to research Tat Hong Holdings to get a better picture of the stock by looking at:
1. Financial Health: Is T03’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.