Investors with a long-term horizong may find it valuable to assess AK Medical Holdings Limited’s (SEHK:1789) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how AK Medical Holdings is currently performing. See our latest analysis for AK Medical Holdings
How Did 1789’s Recent Performance Stack Up Against Its Past?
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 technique enables me to analyze many different companies in a uniform manner using new information. “For AK Medical Holdings, its “, latest earnings is CN¥94.2M, which compared to last year’s level, has risen by 32.46%. Since these values may be fairly nearsighted, I’ve computed an annualized five-year value for 1789’s net income, which stands at CN¥74.8M. This means that, generally, AK Medical Holdings has been able to increasingly raise its earnings over the past couple of years as well.
How has it been able to do this? Let’s see whether it is solely attributable to industry tailwinds, or if AK Medical Holdings has experienced some company-specific growth. The ascend in earnings seems to be driven by a strong top-line increase beating its growth rate of expenses. Though this has led to a margin contraction, it has made AK Medical Holdings more profitable. Viewing growth from a sector-level, the HK medical equipment industry has been growing its average earnings by double-digit 17.37% over the previous year, and a more subdued 8.94% over the previous few years. This means any uplift the industry is benefiting from, AK Medical Holdings is able to leverage this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as AK Medical Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research AK Medical Holdings to get a more holistic view of the stock by looking at:
1. Financial Health: Is 1789’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.
2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.