Today I will examine Landing International Development Limited’s (SEHK:582) latest earnings update (30 June 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of 582’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. Check out our latest analysis for Landing International Development
Could 582 beat the long-term trend and outperform its industry?
I look at 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 method allows me to examine many different companies on a similar basis, using the latest information. For Landing International Development, its most recent bottom-line is -HK$501.3M, which, in comparison to the prior year’s level, has become less negative. Since these values may be fairly myopic, I’ve calculated an annualized five-year figure for Landing International Development’s earnings, which stands at -HK$386.1M. This suggests that, Landing International Development has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards to right direction again.
Additionally, we can evaluate Landing International Development’s loss by looking at what’s going on in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over the last couple of years has grown by 39.71%, indicating that Landing International Development is in a high-growth period with expenses racing ahead high top-line growth rates, leading to yearly losses. Scanning growth from a sector-level, the HK semiconductors and semiconductor equipment industry has been growing its average earnings by double-digit 16.48% in the past year, and a more subdued 6.51% over the past couple of years. This suggests that, despite the fact that Landing International Development is currently loss-making, it may have benefited from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to forecast what will happen in the future and when. The most useful step is to assess company-specific issues Landing International Development may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Landing International Development to get a better picture of the stock by looking at: