MTT Group Holdings Limited (HKG:2350) announced strong profits, but the stock was stagnant. Our analysis suggests that this might be because shareholders have noticed some concerning underlying factors.
View our latest analysis for MTT Group Holdings
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SEHK:2350 Earnings and Revenue History December 26th 2022
Zooming In On MTT Group Holdings' Earnings
One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. 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'.
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".
For the year to September 2022, MTT Group Holdings had an accrual ratio of 0.38. That means it didn't generate anywhere near enough free cash flow to match its profit. As a general rule, that bodes poorly for future profitability. In fact, it had free cash flow of HK$5.2m in the last year, which was a lot less than its statutory profit of HK$61.3m. Given that MTT Group Holdings had negative free cash flow in the prior corresponding period, the trailing twelve month resul of HK$5.2m would seem to be a step in the right direction.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of MTT Group Holdings.
Our Take On MTT Group Holdings' Profit Performance
As we discussed above, we think MTT Group Holdings' earnings were not supported by free cash flow, which might concern some investors. For this reason, we think that MTT Group Holdings' 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, its earnings per share increased by 69% 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 3 warning signs for MTT Group Holdings you should be mindful of and 1 of these is a bit unpleasant.
This note has only looked at a single factor that sheds light on the nature of MTT Group Holdings' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. 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.
萬通集團控股有限公司 (HKG: 2350) 公布強勁利潤,但股價停滯不前。我們的分析表明,這可能是因為股東注意到了一些關於基本因素的問題。
查看我們對 MTT 集團控股的最新分析
![earnings-and-revenue-history](https://usnewsfile.moomoo.com/pic/0-18101695-0-0e2cb9b2eae588523a68830e0b0779df.png/big)
香港聯交所:2350 收益及收益記錄 2022 年十二月二十六日
放大 MTT 集團控股的收益
用於衡量公司將利潤轉換為自由現金流(FCF)的一個關鍵財務比率是 應計比率。應計比率從給定期間的利潤中減去 FCF,並將結果除以該時間內公司的平均營業資產。您可以將現金流量的應計比率視為「非自由現金基金利潤比率」。
因此,負的應計比率對公司來說是正數,而正應計比率則為負值。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」.
截至 2022 年 9 月的年度,MTT 集團控股的累計比率為 0.38。這意味著它沒有產生接近足夠的自由現金流來匹配其利潤。一般來說,這對未來的盈利能力來說是不利的。事實上,該公司在去年的自由現金流為港幣五百二十萬元,較其法定溢利 6130 萬港元少很多。由於 MTT 集團控股於上一個相應時期出現負自由現金流,過去十二個月回升的 5.2 萬港元似乎是朝正確方向邁出的一步。
注意: 我們始終建議投資者檢查資產負債表實力。點擊此處查看我們對 MTT 集團控股的資產負債表分析。
我們對 MTT 集團盈利表現的看法
正如我們上面所討論的,我們認為 MTT 集團的盈利不受自由現金流的支持,這可能會引起一些投資者的關注。基於這個原因,我們認為 MTT 集團的法定利潤可能是其基礎盈利能力的不好指標,並可能給投資者對公司的印象過於積極。好消息是,其每股收益在去年增長了 69%。這篇文章的目的是評估我們可以如何依賴法定收入來反映公司的潛力,但還有很多需要考慮的事情。考慮到這一點,除非我們對風險有全面了解,否則我們不會考慮投資股票。重點案例:我們已經發現 MTT 集團控股的 3 個警告信號 你應該注意,其中 1 個有點不愉快。
本報告只考慮了一個單一因素,以闡明 MTT 集團控股的利潤性質。但是,您是否能夠將自己的思想集中在細節上,總是有更多的事情要發現。有些人認為高股本回報率是一個優質企業的好標誌。雖然代表您可能需要一些研究,但您可能會發現 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。