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.
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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.
儘管發布了一些強勁的收益,市場 萬盈控股 (開曼) 有限公司 's (港股代號:6939) 股票並沒有太大移動。我們做了一些挖掘,我們在細節中發現了一些關於因素的問題。
查看我們關於萬盈控股(開曼)的最新分析
聯交所代碼:6939 二二二零二年九月三十日收益及收入歷
放大 MEGAIN 控股(開曼)的收益
正如金融書呆子已經知道的那樣, 來自現金流的應計比率 是評估公司的自由現金流(FCF)與其利潤相匹配程度的關鍵指標。簡單的英文,這個比率從淨利潤中減去 FCF,並將該數字除以該期間公司的平均運營資產。該比率向我們展示了一家公司的利潤超過其 FCF 的程度。
因此,它實際上被認為是一件好事,當一個公司有一個負的應計比率,但是如果它的應計比率是正的一件壞事。雖然累積比率高於零並沒有什麼關注,但我們確實認為當一家公司具有相對較高的應計比率時,這是值得注意的。報價 2014 年的論文由勒維倫和 Resutek,「公司具有較高的應計額往往是在未來的利潤較少」.
在截至 2022 年 6 月的十二個月內,萬盈控股(開曼)錄得 0.41 的累積比率。這意味著它沒有產生足夠的自由現金流以匹配其利潤的任何地方。從統計學角度來看,這對未來的收益來說是真正的負面影響。實際上,它在去年擁有人民幣 11 萬元的自由現金流,遠低於其法定利潤 43.8 萬人民幣。MEGAIN Holding(開曼)的自由現金流在去年實際上有所下降,但明年可能會反彈,因為自由現金流通常比會計利潤更為波動。
注意: 我們始終建議投資者檢查資產負債表強度。點擊此處可瀏覽我們對萬盈控股(開曼)的資產負債表分析。
我們對萬盈控股(開曼)利潤表現的看法
正如我們已經明確表示的那樣,我們有點擔心 MEGAIN Holding(開曼)沒有通過自由現金流支持去年的利潤。因此,我們認為萬盈控股(開曼)的基礎盈利能力可能低於其法定利潤。好消息是,去年每股收益增加了 61%。本文的目標是評估我們可以如何依靠法定收益來反映公司的潛力,但還有很多要考慮的事情。因此,儘管收益質量很重要,但同樣重要的是要考慮 MEGAIN 控股(開曼)在此時所面臨的風險。例如,我們發現萬盈控股(開曼)有 5 警告標誌 (2 是重要的!)在進一步進行分析之前,值得您關注。
今天,我們放大了一個數據點,以更好地了解 MEGAIN 控股(開曼)的利潤性質。但是,還有很多其他方法可以通知您對公司的意見。例如,許多人認為股權回報率高,作為有利的商業經濟學的指示,而其他人則喜歡「跟隨錢」並搜索內部人士正在購買的股票。雖然可能需要代表您進行一些研究,但您可能會發現這一點 自由 集合擁有高股權回報率的公司,或者內部人士正在購買的股票這個名單是有用的。
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這篇文章由簡單牆聖是一般性質. 我們僅使用公正的方法,根據歷史數據和分析師預測提供評論,我們的文章並不打算作為財務建議。 它並不構成購買或出售任何股票的建議,也不會考慮您的目標或您的財務狀況。我們的目標是為您帶來由基本數據驅動的長期集中分析。請注意,我們的分析可能不會考慮最新的價格敏感公司公告或定性材料。簡易華街在提及的任何股票中都沒有倉位。