Last week's profit announcement from Aeso Holding Limited (HKG:8341) was underwhelming for investors, despite headline numbers being robust. Our analysis uncovered some concerning factors that we believe the market might be paying attention to.
Check out our latest analysis for Aeso Holding
SEHK:8341 Earnings and Revenue History November 21st 2022
Examining Cashflow Against Aeso Holding's Earnings
Many investors haven't heard of the accrual ratio from cashflow, but it is actually a useful measure of how well a company's profit is backed up by free cash flow (FCF) during a given period. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the 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 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. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.
For the year to September 2022, Aeso Holding had an accrual ratio of 0.92. As a general rule, that bodes poorly for future profitability. And indeed, during the period the company didn't produce any free cash flow whatsoever. Even though it reported a profit of HK$13.9m, a look at free cash flow indicates it actually burnt through HK$14m in the last year. Coming off the back of negative free cash flow last year, we imagine some shareholders might wonder if its cash burn of HK$14m, this year, indicates high risk.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Aeso Holding.
Our Take On Aeso Holding's Profit Performance
As we have made quite clear, we're a bit worried that Aeso Holding didn't back up the last year's profit with free cashflow. For this reason, we think that Aeso Holding's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. The good news is that it earned a profit in the last twelve months, despite its previous loss. 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. If you'd like to know more about Aeso Holding as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 3 warning signs with Aeso Holding, and understanding them should be part of your investment process.
This note has only looked at a single factor that sheds light on the nature of Aeso Holding'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.
上週的盈利公告來自 Aeso 控股有限公司 (HKG: 8341)儘管頭條數字強勁,但投資者還是不知所措。我們的分析發現了一些我們認爲市場可能會關注的令人擔憂的因素。
查看我們對 Aeso Holding 的最新分析
聯交所:8341 收益及收入記錄 2022年11月21日
根據Aeso Holding的收益研究現金流
許多投資者還沒有聽說過 現金流應計比率,但它實際上是衡量公司利潤在給定時期內自由現金流(FCF)在多大程度上得到支持的有用指標。爲了獲得應計比率,我們首先從一段時間的利潤中減去FCF,然後將該數字除以該期間的平均運營資產。該比率向我們顯示了公司的利潤超過其FCF的程度。
因此,當公司的應計比率爲負時,這實際上被認爲是一件好事,但如果其應計比率爲正,則是一件壞事。雖然正應計比率表明非現金利潤達到一定水平不是問題,但高應計比率可以說是一件壞事,因爲它表明紙面利潤與現金流不匹配。值得注意的是,有一些學術證據表明,總的來說,高應計率對短期利潤來說是個壞兆頭。
在截至2022年9月的一年中,Aeso Holding的應計比率爲0.92。通常,這對未來的盈利能力來說是個壞兆頭。事實上,在此期間,該公司沒有產生任何自由現金流。儘管該公司公佈的利潤爲1390萬港元,但從自由現金流來看,它實際上在去年消耗了1400萬港元。在去年自由現金流爲負的背景下,我們想象一些股東可能會懷疑其今年1400萬港元的現金消耗是否表明風險很高。
注意: 我們總是建議投資者查看資產負債表的實力。點擊此處查看我們對Aeso Holding的資產負債表分析。
我們對Aeso Holding盈利表現的看法
正如我們已經明確指出的那樣,我們有點擔心Aeso Holding沒有用自由現金流來支持去年的利潤。出於這個原因,我們認爲Aeso Holding的法定利潤可能無法很好地指導其潛在盈利能力,並可能給投資者留下過於積極的公司印象。好消息是,儘管之前出現虧損,但它在過去的十二個月中還是獲得了利潤。當然,在分析其收益時,我們只是浮出水面;人們還可以考慮利潤率、預測增長和投資回報率等因素。如果你想進一步了解Aeso Holding作爲一家企業,重要的是要意識到它面臨的任何風險。在投資風險方面, 我們已經確定了 3 個警告信號 與Aeso Holding合作,了解它們應該是您投資過程的一部分。
這份報告只研究了揭示Aeso Holding利潤性質的單一因素。但是,還有很多其他方法可以讓你對公司的看法。例如,許多人認爲高股本回報率表明商業經濟狀況良好,而另一些人則喜歡 “關注資金”,尋找內部人士正在購買的股票。雖然可能需要代表你進行一些研究,但你可能會發現這個 免費的 一系列擁有高股本回報率的公司,或者這份內部人士爲了有用而買入的股票清單。
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Simply Wall St 的這篇文章本質上是籠統的。 我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。 它不構成買入或賣出任何股票的建議,也沒有考慮您的目標或財務狀況。我們的目標是爲您提供由基本面數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感公司公告或定性材料。簡而言之,華爾街在上述任何股票中都沒有頭寸。