China ITS (Holdings) Co., Ltd.'s (HKG:1900) recent earnings report didn't offer any surprises, with the shares unchanged over the last week. We did some digging, and we think that investors are missing some encouraging factors in the underlying numbers.
See our latest analysis for China ITS (Holdings)
SEHK:1900 Earnings and Revenue History September 22nd 2022
Examining Cashflow Against China ITS (Holdings)'s Earnings
Many investors haven't heard of the accrual ratio from cashflow, but it is actually a useful measure of how well a company's profit is backed up by free cash flow (FCF) during a given period. The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'.
Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.
For the year to June 2022, China ITS (Holdings) had an accrual ratio of -0.15. Therefore, its statutory earnings were very significantly less than its free cashflow. In fact, it had free cash flow of CN¥338m in the last year, which was a lot more than its statutory profit of CN¥38.9m. China ITS (Holdings)'s free cash flow actually declined over the last year, which is disappointing, like non-biodegradable balloons.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of China ITS (Holdings).
Our Take On China ITS (Holdings)'s Profit Performance
As we discussed above, China ITS (Holdings) has perfectly satisfactory free cash flow relative to profit. Based on this observation, we consider it likely that China ITS (Holdings)'s statutory profit actually understates its earnings potential! And one can definitely find a positive in the fact that it made a profit this year, despite losing money last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. If you'd like to know more about China ITS (Holdings) as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that China ITS (Holdings) has 1 warning sign and it would be unwise to ignore this.
This note has only looked at a single factor that sheds light on the nature of China ITS (Holdings)'s profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
中国智能交通系统(控股)有限公司's (HKG: 1900) 最近的收益报告并未带来任何意外,股价与上周持平。我们做了一些挖掘,我们认为投资者在基础数字中遗漏了一些令人鼓舞的因素。
查看我们对中国智能交通系统(控股)的最新分析
香港证券交易所:1900 收益和收入历史记录 2022 年 9 月 22 日
根据中国智能交通系统(控股)的收益审查现金流
许多投资者还没有听说过 现金流应计比率,但它实际上是衡量公司在给定时期内自由现金流(FCF)在多大程度上支持利润的有用指标。应计比率从给定时期的利润中减去FCF,然后将结果除以公司在此期间的平均运营资产。你可以将现金流的应计比率视为 “非FCF利润率”。
因此,当公司的应计比率为负时,这实际上被认为是一件好事,但如果其应计比率为正,则是一件坏事。这并不意味着我们应该担心应计比率为正,但值得注意的是,应计比率相当高的地方。值得注意的是,有一些学术证据表明,总的来说,高应计率对短期利润来说是个坏兆头。
在截至2022年6月的一年中,中国智能交通系统(控股)的应计比率为-0.15。因此,其法定收益大大低于其自由现金流。实际上,它去年的自由现金流为3.38亿元人民币,远远超过了其3,890万元的法定利润。中国智能交通系统(Holdings)的自由现金流实际上比去年有所下降,这令人失望,就像不可生物降解的气球一样。
注意: 我们始终建议投资者检查资产负债表的强度。点击此处查看我们对中国智能交通系统(控股)的资产负债表分析。
我们对中国智能交通系统(控股)利润表现的看法
正如我们上面讨论的,相对于利润,中国智能交通系统(控股公司)的自由现金流非常令人满意。基于这一观察,我们认为中国智能交通系统(Holdings)的法定利润实际上很可能低估了其盈利潜力!尽管去年亏损,但它今年还是实现了盈利,这一事实肯定可以找到积极的一面。本文的目标是评估我们能否在多大程度上依靠法定收益来反映公司的潜力,但还有很多需要考虑的地方。如果您想进一步了解中国智能交通系统(Holdings)作为一家企业,了解其面临的任何风险非常重要。在进行分析时,我们发现中国智能交通系统(控股)有 1 个警告标志 忽视这一点是不明智的。
这份报告仅探讨了揭示中国智能交通系统(控股公司)利润性质的单一因素。但是,如果你能够将注意力集中在细节上,总会有更多东西需要发现。例如,许多人认为高股本回报率表明商业经济状况良好,而另一些人则喜欢 “关注资金”,寻找内部人士正在买入的股票。虽然可能需要你进行一些研究,但你可能会发现这一点 免费的 一系列拥有高股本回报率的公司,或者这份内部人士为了有用而买入的股票清单。
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Simply Wall St 的这篇文章本质上是一般性的。 我们仅使用不偏不倚的方法根据历史数据和分析师预测提供评论,我们的文章并非旨在提供财务建议。 它不构成买入或卖出任何股票的建议,也没有考虑您的目标或财务状况。我们的目标是为您提供由基本面数据驱动的长期重点分析。请注意,我们的分析可能未将最新的价格敏感型公司公告或定性材料考虑在内。简而言之,华尔街对上述任何股票都没有头寸。