Yahoo Finance Want To Invest In mm2 Asia Ltd (SGX:1B0)? Here’s How It Performed Lately
In this article, I will take a look at mm2 Asia Ltd’s (SGX:1B0) most recent earnings update (31 March 2018) and compare these latest figures against its performance over the past few years, along with how the rest of 1B0’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for mm2 Asia
Did 1B0’s recent earnings growth beat the long-term trend and the industry?
1B0’s trailing twelve-month earnings (from 31 March 2018) of S$26.44m has jumped 40.93% compared to the previous year. However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 41.28%, indicating the rate at which 1B0 is growing has slowed down. What could be happening here? Well, let’s look at what’s going on with margins and whether the entire industry is feeling the heat.
Revenue growth in the last couple of years, has been positive, however, earnings growth has failed to keep up meaning mm2 Asia has been increasing its expenses by a lot more. This harms margins and earnings, and is not a sustainable practice. Eyeballing growth from a sector-level, the SG media industry has been growing its average earnings by double-digit 15.74% over the past twelve months, and 10.37% over the previous five years. This shows that any tailwind the industry is gaining from, mm2 Asia is able to amplify this to its advantage.
In terms of returns from investment, mm2 Asia has not invested its equity funds well, leading to a 15.79% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 4.79% is below the SG Media industry of 5.88%, indicating mm2 Asia’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for mm2 Asia’s debt level, has declined over the past 3 years from 30.96% to 14.60%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as mm2 Asia gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research mm2 Asia to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 1B0’s future growth? Take a look at our free research report of analyst consensus for 1B0’s outlook.
Financial Health: Is 1B0’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
