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We Don't Think SIM Technology Group's (HKG:2000) Earnings Should Make Shareholders Too Comfortable

We Don't Think SIM Technology Group's (HKG:2000) Earnings Should Make Shareholders Too Comfortable

我們認爲SIm科技集團(HKG:2000)的收益不應讓股東感到太舒適
Simply Wall St ·  09/27 19:10

Solid profit numbers didn't seem to be enough to please SIM Technology Group Limited's (HKG:2000) shareholders. Our analysis has found some concerning factors which weaken the profit's foundation.

實 profit 數字似乎不能滿足SIm Technology Group Limited的(HKG:2000)股東。 我們的分析發現了一些令人擔憂的因素,這些因素削弱了利潤的基礎。

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SEHK:2000 Earnings and Revenue History September 27th 2024
SEHK:2000盈利和營業收入歷史 資訊 2024年9月27日

A Closer Look At SIM Technology Group's Earnings

近看SIm Technology Group的盈利

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. 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.

正如財務迷們已經知道的那樣,現金流的應計比率是評估公司自由現金流(FCF)與利潤匹配程度的重要指標。爲了獲得應計比率,我們首先減去一段時間的FCF和利潤,然後將該數字除以該期間的平均營運資產。該比率顯示了公司的利潤超過其FCF的多少。

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.

因此,當一家公司的應計比率變爲負數時,這實際上是一件好事,但如果應計比率是正數,則是一件壞事。雖然應計比率爲正數並不是問題,這表明一定程度的非現金利潤,但高應計比率被認爲是一件壞事,因爲它表明紙面利潤無法與現金流相匹配。值得注意的是,一些學術證據表明,高應計比率通常是近期利潤的一個不好的跡象。

Over the twelve months to June 2024, SIM Technology Group recorded an accrual ratio of 0.46. As a general rule, that bodes poorly for future profitability. To wit, the company did not generate one whit of free cashflow in that time. In the last twelve months it actually had negative free cash flow, with an outflow of HK$67m despite its profit of HK$312.4m, mentioned above. Coming off the back of negative free cash flow last year, we imagine some shareholders might wonder if its cash burn of HK$67m, this year, indicates high risk. Having said that, there is more to the story. The accrual ratio is reflecting the impact of unusual items on statutory profit, at least in part. The good news for shareholders is that SIM Technology Group'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. As a result, some shareholders may be looking for stronger cash conversion in the current year.

在截至2024年6月的十二個月內,SIm Technology Group記錄了0.46的應計比率。 一般規則是,這對未來的盈利性不利。 換句話說,在那段時間內,公司沒有產生任何自由現金流。 在過去的十二個月裏,儘管報道的利潤爲31240萬港元,但實際上它的自由現金流是負的,流出了6700萬港元。 鑑於去年的負自由現金流,我們可以想象一些股東可能會疑惑,今年的6700萬港元的現金燃燒是否表示高風險。 話雖如此,事情遠不止如此。 應計比率反映了特殊項目對財務利潤的影響,至少在一定程度上。 對股東的好消息是,SIm Technology Group的應計比率去年要好得多,因此今年的差勁表現可能只是利潤和自由現金流之間短期不匹配的案例。 因此,一些股東可能在本年度尋求更強的現金轉換。

Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of SIM Technology Group.

注意:我們始終建議投資者檢查資產負債表的實力。 點擊這裏查看我們對SIm Technology Group資產負債表分析。

How Do Unusual Items Influence Profit?

非常規項目如何影響利潤?

Given the accrual ratio, it's not overly surprising that SIM Technology Group's profit was boosted by unusual items worth HK$493m in the last twelve months. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's as you'd expect, given these boosts are described as 'unusual'. SIM Technology Group had a rather significant contribution from unusual items relative to its profit to June 2024. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.

考慮到應計比率,SIm Technology Group最近12個月的利潤得到了價值49300萬港元的飛凡項目支持,這並不意外。雖然我們喜歡看到利潤的增長,但當飛凡項目做出重大貢獻時,我們往往會保持更加謹慎。當我們分析全球大多數上市公司時,我們發現重要的飛凡項目往往不會再次出現。這符合預期,因爲這些提振被描述爲「飛凡」。與2024年6月相比,SIm Technology Group的利潤中有一部分相當大的飛凡項目貢獻。因此,我們可以推斷,這些飛凡項目使其法定利潤比原本更加顯著。

Our Take On SIM Technology Group's Profit Performance

我們對SIm Technology Group利潤表現的看法

Summing up, SIM Technology Group received a nice boost to profit from unusual items, but could not match its paper profit with free cash flow. For all the reasons mentioned above, we think that, at a glance, SIM Technology Group's statutory profits could be considered to be low quality, because they are likely to give investors an overly positive impression of the company. So while earnings quality is important, it's equally important to consider the risks facing SIM Technology Group at this point in time. For example, SIM Technology Group has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

總結一下,SIm Technology Group的利潤受到了飛凡項目的良好支持,但無法用自由現金流匹配其賬面利潤。基於上述所有原因,我們認爲乍一看,SIm Technology Group的法定利潤可能被認爲是低質量的,因爲它們可能會給投資者過於積極的印象。因此,雖然盈利質量很重要,但同樣重要的是考慮SIm Technology Group當前面臨的風險。例如,SIm Technology Group有2個警示信號(以及一個讓我們感到有些不舒服的信號),我們認爲您應該了解。

In this article we've looked at a number of factors that can impair the utility of profit numbers, and we've come away cautious. 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. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

在本文中,我們已經看到了可以損害利潤數字實用性的許多因素,而且我們已經變得謹慎。但是,如果您能夠將注意力集中在細節上,則總有更多發現。有些人認爲高淨資產回報率是高質量企業的一個好標誌。因此,您可能希望查看這個高淨資產回報率的免費公司收集,或這個高內部所有權的股票清單。

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.

對本文有任何反饋?對內容有任何疑慮?請直接與我們聯繫。或者,發送電子郵件至editorial-team@simplywallst.com。
這篇文章是Simply Wall St的一般性文章。我們根據歷史數據和分析師預測提供評論,只使用公正的方法論,我們的文章並不意味着提供任何金融建議。文章不構成買賣任何股票的建議,也不考慮您的目標或您的財務狀況。我們的目標是帶給您基本數據驅動的長期關注分析。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。Simply Wall St沒有任何股票頭寸。

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