Despite posting some strong earnings, the market for MEGAIN Holding (Cayman) Co., Ltd.'s (HKG:6939) stock hasn't moved much. We did some digging, and we found some concerning factors in the details.
View our latest analysis for MEGAIN Holding (Cayman)
SEHK:6939 Earnings and Revenue History September 30th 2022
Zooming In On MEGAIN Holding (Cayman)'s Earnings
As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. The ratio shows us how much a company's profit exceeds its FCF.
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. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future".
Over the twelve months to June 2022, MEGAIN Holding (Cayman) recorded an accrual ratio of 0.41. That means it didn't generate anywhere near enough free cash flow to match its profit. Statistically speaking, that's a real negative for future earnings. In fact, it had free cash flow of CN¥11m in the last year, which was a lot less than its statutory profit of CN¥43.8m. MEGAIN Holding (Cayman)'s free cash flow actually declined over the last year, but it may bounce back next year, since free cash flow is often more volatile than accounting profits.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of MEGAIN Holding (Cayman).
Our Take On MEGAIN Holding (Cayman)'s Profit Performance
As we have made quite clear, we're a bit worried that MEGAIN Holding (Cayman) didn't back up the last year's profit with free cashflow. As a result, we think it may well be the case that MEGAIN Holding (Cayman)'s underlying earnings power is lower than its statutory profit. The good news is that, its earnings per share increased by 61% in the 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. So while earnings quality is important, it's equally important to consider the risks facing MEGAIN Holding (Cayman) at this point in time. For example, we've found that MEGAIN Holding (Cayman) has 5 warning signs (2 are significant!) that deserve your attention before going any further with your analysis.
Today we've zoomed in on a single data point to better understand the nature of MEGAIN Holding (Cayman)'s profit. But there are plenty of other ways to inform your opinion of a company. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
尽管公布了强劲的收益,但市场 美佳控股(开曼)有限公司's (HKG: 6939) 股票波动不大。我们做了一些挖掘,在细节中发现了一些令人担忧的因素。
查看我们对MEGAIN控股(开曼)的最新分析
SEHK: 6939 2022 年 9 月 30 日收益和收入历史
放大MEGAIN Holding(开曼)的收益
正如金融爱好者已经知道的那样, 现金流应计比率 是评估公司的自由现金流(FCF)与利润相匹配程度的关键指标。简而言之,该比率从净利润中减去FCF,然后将该数字除以公司在此期间的平均运营资产。该比率向我们显示了公司的利润超过其FCF的程度。
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。虽然应计比率高于零并不令人担忧,但我们确实认为,当公司的应计比率相对较高时,值得注意。引用Lewellen和Resutek在2014年发表的一篇论文,“应计额较高的公司将来的利润往往会降低”。
在截至2022年6月的十二个月中,MEGAIN控股(开曼)的应计比率为0.41。这意味着它产生的自由现金流远不足以匹配其利润。从统计学上讲,这对未来的收益来说确实是负数。实际上,它去年的自由现金流为1100万元人民币,远低于其4,380万元的法定利润。MEGAIN Holding(开曼)的自由现金流实际上在去年有所下降,但明年可能会反弹,因为自由现金流通常比会计利润更具波动性。
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MEGAIN Holding(开曼)的资产负债表分析。
我们对MEGAIN控股(开曼)利润表现的看法
正如我们已经明确指出的那样,我们有点担心MEGAIN Holding(开曼)没有用自由现金流来支持去年的利润。因此,我们认为MEGAIN Holding(开曼)的基础盈利能力很可能低于其法定利润。好消息是,其每股收益在去年增长了61%。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。因此,尽管收益质量很重要,但考虑MEGAIN Holding(开曼)目前面临的风险同样重要。例如,我们发现MEGAIN控股(开曼)有 5 个警告标志 (2 很重要!)在进一步分析之前,值得你关注。
今天,我们放大了单个数据点,以更好地了解MEGAIN Holding(开曼)的利润性质。但是还有很多其他方法可以告诉你对公司的看法。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。
对这篇文章有反馈吗?对内容感到担忧? 取得联系 直接和我们联系。 或者,给编辑团队 (at) simplywallst.com 发送电子邮件。
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。