The subdued stock price reaction suggests that King Fook Holdings Limited's (HKG:280) strong earnings didn't offer any surprises. Investors are probably missing some underlying factors which are encouraging for the future of the company.
See our latest analysis for King Fook Holdings
SEHK:280 Earnings and Revenue History July 28th 2022
A Closer Look At King Fook 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. 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.
That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. 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".
Over the twelve months to March 2022, King Fook Holdings recorded an accrual ratio of -0.27. That indicates that its free cash flow quite significantly exceeded its statutory profit. In fact, it had free cash flow of HK$162m in the last year, which was a lot more than its statutory profit of HK$60.1m. King Fook Holdings shareholders are no doubt pleased that free cash flow improved over the last twelve months.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of King Fook Holdings.
Our Take On King Fook Holdings' Profit Performance
Happily for shareholders, King Fook Holdings produced plenty of free cash flow to back up its statutory profit numbers. Because of this, we think King Fook Holdings' underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! And on top of that, its earnings per share have grown at an extremely impressive rate over the last three years. 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've discovered 3 warning signs that you should run your eye over to get a better picture of King Fook Holdings.
This note has only looked at a single factor that sheds light on the nature of King Fook Holdings' profit. But there is always more to discover if you are capable of focussing your mind on minutiae. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
股价的低迷反应表明 景福控股有限公司的 (HKG: 280) 强劲的收益并没有带来任何意外。投资者可能遗漏了一些令公司未来感到鼓舞的潜在因素。
查看我们对景福控股的最新分析
SEHK: 280 2022 年 7 月 28 日的收益和收入记录
仔细看看金福控股的收益
用于衡量公司将其利润转换为自由现金流(FCF)效果的一个关键财务比率是 应计比率。简而言之,该比率从净利润中减去FCF,然后将该数字除以公司在此期间的平均运营资产。该比率向我们显示了公司的利润超过其FCF的程度。
这意味着负应计比率是一件好事,因为它表明该公司带来的自由现金流比其利润所暗示的要多。虽然正应计比率表明非现金利润达到一定水平不是问题,但高应计比率可以说是一件坏事,因为它表明纸面利润与现金流不匹配。引用Lewellen和Resutek在2014年发表的一篇论文,“应计额较高的公司将来的利润往往会降低”。
在截至2022年3月的十二个月中,景福控股的应计比率为-0.27。这表明其自由现金流大大超过了其法定利润。实际上,它去年的自由现金流为1.62亿港元,远远超过其6,010万港元的法定利润。毫无疑问,景福控股的股东对自由现金流在过去十二个月中有所改善感到高兴。
注意: 我们始终建议投资者检查资产负债表的强度。点击此处查看我们对景福控股的资产负债表分析。
我们对景福控股盈利表现的看法
令股东感到高兴的是,景福控股产生了充足的自由现金流来支持其法定利润数字。正因为如此,我们认为景福控股的基础收益潜力与法定利润看上去一样好,甚至可能更好!最重要的是,在过去三年中,其每股收益以极其惊人的速度增长。归根结底,如果你想正确地了解公司,就必须考虑的不仅仅是上述因素。考虑到这一点,除非我们对风险有透彻的了解,否则我们不会考虑投资股票。例如,我们发现了 3 个警告标志 为了更好地了解景福控股,你应该仔细观察一下。
这份报告只考虑了揭示金福控股利润性质的单一因素。但是,如果你能够将注意力集中在细节上,总会有更多东西需要发现。例如,许多人认为高股本回报率表明商业经济状况良好,而另一些人则喜欢 “关注资金”,寻找内部人士正在买入的股票。虽然可能需要你进行一些研究,但你可能会发现这一点 免费的 一系列拥有高股本回报率的公司,或者这份内部人士为了有用而买入的股票清单。
对这篇文章有反馈吗?对内容感到担忧? 取得联系 直接和我们联系。 或者,给编辑团队 (at) simplywallst.com 发送电子邮件。
Simply Wall St 的这篇文章本质上是一般性的。 我们仅使用不偏不倚的方法根据历史数据和分析师预测提供评论,我们的文章并非旨在提供财务建议。 它不构成买入或卖出任何股票的建议,也没有考虑您的目标或财务状况。我们的目标是为您提供由基本面数据驱动的长期重点分析。请注意,我们的分析可能未将最新的价格敏感型公司公告或定性材料考虑在内。简而言之,华尔街对上述任何股票都没有头寸。