Shareholders appeared unconcerned with Winson Holdings Hong Kong Limited's (HKG:6812) lackluster earnings report last week. Our analysis suggests that while the profits are soft, the foundations of the business are strong.
Check out our latest analysis for Winson Holdings Hong Kong
SEHK:6812 Earnings and Revenue History July 7th 2022
Examining Cashflow Against Winson Holdings Hong Kong'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. This ratio tells us how much of a company's profit is not backed by free cashflow.
As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future".
For the year to March 2022, Winson Holdings Hong Kong had an accrual ratio of -0.13. That implies it has good cash conversion, and implies that its free cash flow solidly exceeded its profit last year. To wit, it produced free cash flow of HK$33m during the period, dwarfing its reported profit of HK$22.1m. Winson Holdings Hong Kong'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 Winson Holdings Hong Kong.
Our Take On Winson Holdings Hong Kong's Profit Performance
As we discussed above, Winson Holdings Hong Kong has perfectly satisfactory free cash flow relative to profit. Based on this observation, we consider it likely that Winson Holdings Hong Kong's statutory profit actually understates its earnings potential! And on top of that, its earnings per share have grown at 6.0% per year over the last three years. 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 want to do dive deeper into Winson Holdings Hong Kong, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 3 warning signs with Winson Holdings Hong Kong, and understanding these should be part of your investment process.
This note has only looked at a single factor that sheds light on the nature of Winson Holdings Hong Kong'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. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.
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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.
股東們似乎並不擔心永盛控股香港有限公司的(HKG:6812)上週財報乏善可陳。我們的分析表明,儘管利潤疲軟,但業務的基礎是強大的。
查看我們對Winson Holdings Hong Kong的最新分析
聯交所:6812盈利及收入歷史2022年7月7日
對照永盛控股香港的盈利審查現金流
正如金融書呆子們已經知道的那樣,現金流應計比率是評估一家公司的自由現金流(FCF)與利潤匹配程度的關鍵指標。簡單地説,這個比率是從淨利潤中減去FCF,然後用這個數字除以該公司在此期間的平均運營資產。這個比率告訴我們,一家公司的利潤中有多少不是由自由現金流支持的。
因此,負的應計比率對公司是積極的,而正的應計比率是負的。雖然應計比率為正並不是問題,這表明非現金利潤達到了一定的水平,但高的應計比率可以説是一件壞事,因為它表明賬面利潤與現金流不匹配。引用勒維倫和雷蘇泰克2014年的一篇論文,“應計利潤較高的公司未來的利潤往往較低”。
在截至2022年3月的一年中,温森控股香港的應計比率為-0.13。這意味着它有很好的現金轉換率,並意味着它的自由現金流穩步超過了去年的利潤。換言之,該公司在此期間產生了3300萬港元的自由現金流,令其公佈的2210萬港元利潤相形見絀。温森控股香港的自由現金流實際上在去年有所下降,這令人失望,就像不可生物降解的氣球一樣。
注:我們總是建議投資者檢查資產負債表的實力。點擊此處查看我們對永盛控股香港的資產負債表分析。
我們對永盛控股香港盈利表現的看法
如上所述,永盛控股香港擁有令人滿意的自由現金流相對於利潤。基於這一觀察,我們認為温森控股香港的法定利潤很可能實際上低估了其盈利潛力!最重要的是,它的每股收益在過去三年裏以每年6.0%的速度增長。本文的目的是評估我們可以在多大程度上依賴法定收益來反映公司的潛力,但還有很多東西需要考慮。如果你真的想更深入地研究永盛控股香港,你還應該調查一下它目前面臨的風險。在投資風險方面,我們已經確定了三個警告信號與永盛控股香港合作,並瞭解這些應該是你投資過程的一部分。
這份報告只關注了一個因素,它揭示了永盛控股香港的利潤性質。但還有很多其他方式可以讓你瞭解一家公司的看法。例如,許多人認為高股本回報率是有利的商業經濟指標,而另一些人則喜歡“跟着錢走”,尋找內部人士正在買入的股票。所以你可能想看看這個免費擁有高股本回報率的公司的集合,或內部人士正在購買的這份股票清單。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。