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 Uni-Bio Science Group Limited (SEHK:690) useful as an attempt to give more color around how Uni-Bio Science Group is currently performing. Check out our latest analysis for Uni-Bio Science Group
Despite a decline, did 690 underperform the long-term trend and the 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 blend allows me to examine different stocks on a more comparable basis, using the most relevant data points. For Uni-Bio Science Group, the latest twelve-month earnings -HK$64.3M, which, in comparison to last year’s level, has become more negative. Since these figures may be somewhat short-term, I have estimated an annualized five-year figure for Uni-Bio Science Group’s net income, which stands at -HK$134.6M. This means while net income is negative, it has become less negative over the years.
Additionally, we can assess Uni-Bio Science Group’s loss by researching what’s going on in the industry on top of within the company. Firstly, I want to briefly look into the line items. Revenue growth over last couple of years has grew by 13.59%, signalling that Uni-Bio Science Group is in a high-growth period with expenses racing ahead elevated top-line growth rates. Inspecting growth from a sector-level, the HK biotechnology industry has been growing its average earnings by double-digit 23.70% over the prior twelve months, and 10.77% over the past five years. This means that any uplift the industry is deriving benefit from, Uni-Bio Science Group has not been able to realize the gains unlike its industry peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will happen in the future and when. The most valuable step is to assess company-specific issues Uni-Bio Science Group may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Uni-Bio Science Group to get a more holistic view of the stock by looking at:
1. Financial Health: Is 690’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.