Investors with a long-term horizong may find it valuable to assess CIMC-TianDa Holdings Company Limited's (SEHK:445) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how CIMC-TianDa Holdings is currently performing.
How 445 fared against its long-term earnings performance and its industry
445's trailing twelve-month earnings (from 30 June 2019) of CN¥195m has jumped 26% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 22%, indicating the rate at which 445 is growing has accelerated. What's enabled this growth? Let's see if it is solely owing to an industry uplift, or if CIMC-TianDa Holdings has seen some company-specific growth.
In terms of returns from investment, CIMC-TianDa Holdings has fallen short of achieving a 20% return on equity (ROE), recording 5.7% instead. Furthermore, its return on assets (ROA) of 3.0% is below the HK Machinery industry of 5.2%, indicating CIMC-TianDa Holdings's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for CIMC-TianDa Holdings’s debt level, has declined over the past 3 years from 7.8% to 7.0%.
What does this mean?
CIMC-TianDa Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While CIMC-TianDa Holdings has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research CIMC-TianDa Holdings to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 445’s future growth? Take a look at our free research report of analyst consensus for 445’s outlook.
- Financial Health: Are 445’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 30 June 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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