BetterLife Holding Limited's (HKG:6909) robust recent earnings didn't do much to move the stock. However the statutory profit number doesn't tell the whole story, and we have found some factors which might be of concern to shareholders.
Check out our latest analysis for BetterLife Holding
SEHK:6909 Earnings and Revenue History September 20th 2022
Examining Cashflow Against BetterLife Holding's 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.
As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. 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".
BetterLife Holding has an accrual ratio of 0.21 for the year to June 2022. Therefore, we know that it's free cashflow was significantly lower than its statutory profit, which is hardly a good thing. To wit, it produced free cash flow of CN¥6.3m during the period, falling well short of its reported profit of CN¥406.0m. BetterLife Holding shareholders will no doubt be hoping that its free cash flow bounces back next year, since it was down over the last twelve months. The good news for shareholders is that BetterLife Holding's accrual ratio was much better last year, so this year's poor reading might simply be a case of a short term mismatch between profit and FCF. Shareholders should look for improved cashflow relative to profit in the current year, if that is indeed the case.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On BetterLife Holding's Profit Performance
BetterLife Holding's accrual ratio for the last twelve months signifies cash conversion is less than ideal, which is a negative when it comes to our view of its earnings. Therefore, it seems possible to us that BetterLife Holding's true underlying earnings power is actually less than its statutory profit. In further bad news, its earnings per share decreased in the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. If you want to do dive deeper into BetterLife Holding, you'd also look into what risks it is currently facing. Be aware that BetterLife Holding is showing 2 warning signs in our investment analysis and 1 of those doesn't sit too well with us...
This note has only looked at a single factor that sheds light on the nature of BetterLife Holding's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. 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.
美好生活控股有限公司的(HKG:6909)近期強勁的收益對股價影響不大。然而,法定利潤數字並不能説明全部情況,我們發現了一些可能引起股東關注的因素。
查看我們對BetterLife Holding的最新分析
聯交所:6909盈利及收入歷史2022年9月20日
考察現金流與BetterLife Holding的收益
在高端金融領域,衡量一家公司將報告利潤轉換為自由現金流(FCF)的程度的關鍵比率是應計比率(來自現金流)。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。這個比率向我們展示了一家公司的利潤超過了它的FCF的多少。
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。雖然應計比率高於零並不令人擔憂,但我們確實認為,當一家公司的應計比率相對較高時,這一點值得注意。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”。
BetterLife Holding在截至2022年6月的一年中的應計比率為0.21。因此,我們知道它的自由現金流明顯低於其法定利潤,這很難説是一件好事。換言之,該公司在此期間產生了630萬加元的自由現金流,遠低於其公佈的4.06億加元的利潤。BetterLife Holding的股東無疑希望其自由現金流在明年反彈,因為它在過去12個月裏一直在下降。對股東來説,好消息是BetterLife Holding去年的應計比率要好得多,因此今年的糟糕讀數可能只是利潤和FCF之間短期錯配的一個例子。如果情況確實如此,股東應該期待本年度相對於利潤的現金流有所改善。
這可能會讓你想知道,分析師對未來盈利能力的預測是什麼。幸運的是,您可以單擊此處查看基於他們估計的未來盈利能力的互動圖表。
我們對BetterLife Holding利潤表現的看法
BetterLife Holding在過去12個月的應計比率表明,現金轉換不太理想,這對我們對其收益的看法是負面的。因此,在我們看來,BetterLife Holding的真實潛在盈利能力實際上可能低於其法定利潤。更壞的消息是,該公司去年的每股收益有所下降。歸根結底,如果你想正確地瞭解這家公司,除了以上幾個因素之外,考慮其他因素也是至關重要的。如果你真的想更深入地研究BetterLife Holding,你還應該調查它目前面臨的風險。請注意,BetterLife Holding正在顯示我們的投資分析中的2個警告信號其中有一件我們不太滿意...
這份報告只關注了一個因素,它揭示了BetterLife Holding的利潤本質。但還有很多其他方式可以讓你瞭解一家公司的看法。一些人認為,高股本回報率是高質量企業的良好標誌。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。