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With 2.0% Earnings Growth, Did PICC Property and Casualty Company Limited (HKG:2328) Outperform The Industry?

Simply Wall St

Analyzing PICC Property and Casualty Company Limited's (HKG:2328) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess 2328's recent performance announced on 30 June 2019 and compare these figures to its long-term trend and industry movements.

View our latest analysis for PICC Property and Casualty

Could 2328 beat the long-term trend and outperform its industry?

2328's trailing twelve-month earnings (from 30 June 2019) of CN¥20b has increased by 2.0% 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 3.1%, indicating the rate at which 2328 is growing has slowed down. Why could this be happening? Well, let's look at what's occurring with margins and whether the rest of the industry is feeling the heat.

SEHK:2328 Income Statement, September 24th 2019

In terms of returns from investment, PICC Property and Casualty has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 3.7% exceeds the HK Insurance industry of 1.9%, indicating PICC Property and Casualty has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for PICC Property and Casualty’s debt level, has declined over the past 3 years from 8.1% to 5.4%.

What does this mean?

PICC Property and Casualty's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research PICC Property and Casualty to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 2328’s future growth? Take a look at our free research report of analyst consensus for 2328’s outlook.
  2. Financial Health: Are 2328’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.
  3. 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 30 June 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.