Orient Victory Smart Urban Services Holding's (HKG:265) Promising Earnings May Rest On Soft Foundations
Orient Victory Smart Urban Services Holding's (HKG:265) Promising Earnings May Rest On Soft Foundations
Orient Victory Smart urban Services Holding Limited (HKG:265) announced strong profits, but the stock was stagnant. We did some digging, and we found some concerning factors in the details.
东方胜利智慧城市服务控股有限公司(HKG：265)公布强劲盈利，但股价停滞不前。我们做了一些挖掘，我们在细节中发现了一些令人担忧的因素。
View our latest analysis for Orient Victory Smart urban Services Holding
查看我们对东方胜利智慧城市服务控股的最新分析
Zooming In On Orient Victory Smart urban Services Holding's Earnings
放大东方胜利智能城市服务控股公司的收益
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). 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'.
在高端金融领域，衡量一家公司将报告利润转换为自由现金流(FCF)的程度的关键比率是应计比率(来自现金流)。应计制比率从给定期间的利润中减去FCF，然后将结果除以该时间段内公司的平均运营资产。你可以把来自现金流的应计比率看作是‘非FCF利润率’。
As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. 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.
因此，负的应计比率对公司是积极的，而正的应计比率是负的。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，在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，一般来说，高应计比率对短期利润来说不是一个好兆头。
Over the twelve months to June 2023, Orient Victory Smart urban Services Holding recorded an accrual ratio of 0.20. Therefore, we know that it's free cashflow was significantly lower than its statutory profit, which is hardly a good thing. Even though it reported a profit of HK$25.2m, a look at free cash flow indicates it actually burnt through HK$51m in the last year. It's worth noting that Orient Victory Smart urban Services Holding generated positive FCF of HK$98m a year ago, so at least they've done it in the past. One positive for Orient Victory Smart urban Services Holding shareholders is that it's accrual ratio was significantly better last year, providing reason to believe that it may return to stronger cash conversion in the future. As a result, some shareholders may be looking for stronger cash conversion in the current year.
截至2023年6月的12个月内，东方胜利智慧城市服务控股录得0.20的应计比率。因此，我们知道它的自由现金流明显低于其法定利润，这很难说是一件好事。尽管该公司报告盈利2520万港元，但看看自由现金流就会发现，该公司去年实际上烧掉了5100万港元。值得注意的是，东方胜利智慧城市服务控股一年前产生了9800万港元的正FCF，所以至少他们过去做到了。对于东方胜利智能城市服务控股公司的股东来说，一个积极的因素是，该公司去年的应计制比率明显好于去年，这提供了一个理由，让人相信该公司未来可能会恢复更强劲的现金转换。因此，一些股东可能希望在本年度实现更强劲的现金转换。
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Orient Victory Smart urban Services Holding.
注：我们总是建议投资者检查资产负债表的实力。点击此处查看我们对东方胜利智慧城市服务控股的资产负债表分析。
Our Take On Orient Victory Smart urban Services Holding's Profit Performance
我们对东方胜利智慧城市服务控股公司盈利表现的看法
Orient Victory Smart urban Services Holding didn't convert much of its profit to free cash flow in the last year, which some investors may consider rather suboptimal. Therefore, it seems possible to us that Orient Victory Smart urban Services Holding's true underlying earnings power is actually less than its statutory profit. On the bright side, the company showed enough improvement to book a profit this year, after losing money last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. To that end, you should learn about the 3 warning signs we've spotted with Orient Victory Smart urban Services Holding (including 1 which makes us a bit uncomfortable).
东方胜利智能城市服务控股公司去年没有将大部分利润转化为自由现金流，一些投资者可能认为这相当不理想。因此，在我们看来，东方胜利智慧城市服务控股的真实潜在盈利能力实际上可能低于其法定利润。好的一面是，该公司在去年亏损后，表现出了足够的改善，今年实现了盈利。当然，当谈到分析其收益时，我们只是触及了皮毛；人们还可以考虑利润率、预测增长和投资回报等因素。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是至关重要的。为此，您应该了解3个警示标志我们发现了东方胜利智能城市服务控股公司(包括1家，这让我们有点不舒服)。
This note has only looked at a single factor that sheds light on the nature of Orient Victory Smart urban Services Holding'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.
这份报告只关注了一个因素，该因素揭示了东方胜利智慧城市服务控股公司的利润性质。但如果你有能力将注意力集中在细枝末节上，总会有更多的东西需要发现。例如，许多人认为高股本回报率是有利的商业经济指标，而另一些人则喜欢“跟着钱走”，寻找内部人士正在买入的股票。虽然这可能需要为您做一些研究，但您可能会发现免费拥有高股本回报率的公司的集合，或者是内部人士购买的有用的股票清单。
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