EFT Solutions Holdings Limited's (HKG:8062) earnings announcement last week didn't impress shareholders. However, our analysis suggests that the soft headline numbers are getting counterbalanced by some positive underlying factors.
View our latest analysis for EFT Solutions Holdings
SEHK:8062 Earnings and Revenue History November 18th 2022
Examining Cashflow Against EFT Solutions Holdings' Earnings
In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). 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. 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.
EFT Solutions Holdings has an accrual ratio of -0.19 for the year to September 2022. Therefore, its statutory earnings were very significantly less than its free cashflow. Indeed, in the last twelve months it reported free cash flow of HK$25m, well over the HK$12.3m it reported in profit. EFT Solutions Holdings' free cash flow improved over the last year, which is generally good to see.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of EFT Solutions Holdings.
Our Take On EFT Solutions Holdings' Profit Performance
As we discussed above, EFT Solutions Holdings' accrual ratio indicates strong conversion of profit to free cash flow, which is a positive for the company. Based on this observation, we consider it possible that EFT Solutions Holdings' statutory profit actually understates its earnings potential! Unfortunately, though, its earnings per share actually fell back over 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 if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 4 warning signs for EFT Solutions Holdings you should be mindful of and 1 of them is significant.
Today we've zoomed in on a single data point to better understand the nature of EFT Solutions Holdings' 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.
EFT Solutions 控股有限公司的 (HKG: 8062) 上周的财报公告并没有给股东留下深刻的印象。但是,我们的分析表明,一些积极的潜在因素正在抵消软的标题数字。
查看我们对EFT Solutions控股的最新分析
SEHK: 8062 收益和收入历史 2022 年 11 月 18 日
根据EFT Solutions Holdings的收益研究现金流
在高级财务中,用于衡量公司将申报的利润转化为自由现金流(FCF)的效果的关键比率是 应计比率 (来自现金流)。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。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。
截至2022年9月的一年中,EFT Solutions Holdings的应计比率为-0.19。因此,其法定收益大大低于其自由现金流。事实上,在过去的十二个月中,该公司公布的自由现金流为2500万港元,远远超过其公布的1230万港元的利润。EFT Solutions Holdings的自由现金流比去年有所改善,这总体上是好的。
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EFT Solutions Holdings的资产负债表分析。
我们对EFT Solutions Holdings利润表现的看法
正如我们上面讨论的那样,EFT Solutions Holdings的应计比率表明利润向自由现金流的转化率很高,这对公司来说是积极的。基于这一观察,我们认为EFT Solutions Holdings的法定利润实际上可能低估了其盈利潜力!但不幸的是,其每股收益实际上比去年有所回落。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,如果你想更深入地研究这只股票,考虑它面临的任何风险至关重要。一个很好的例子:我们发现了 电子转账解决方案控股公司的 4 个警告标志 你应该注意,其中一个很重要。
今天,我们放大了单个数据点,以更好地了解EFT Solutions Holdings利润的性质。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。