Analyzing CITIC Telecom International Holdings Limited's (SEHK:1883) 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 1883's recent performance announced on 30 June 2019 and compare these figures to its long-term trend and industry movements.
Were 1883's earnings stronger than its past performances and the industry?
1883's trailing twelve-month earnings (from 30 June 2019) of HK$973m has increased by 6.3% 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 7.0%, indicating the rate at which 1883 is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and if the whole industry is experiencing the hit as well.
In terms of returns from investment, CITIC Telecom International Holdings has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 7.1% exceeds the HK Telecom industry of 3.1%, indicating CITIC Telecom International Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for CITIC Telecom International Holdings’s debt level, has increased over the past 3 years from 9.2% to 9.5%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 125% to 73% over the past 5 years.
What does this mean?
Though CITIC Telecom International Holdings's past data is helpful, it is only one aspect of my investment thesis. While CITIC Telecom International 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 CITIC Telecom International Holdings to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 1883’s future growth? Take a look at our free research report of analyst consensus for 1883’s outlook.
- Financial Health: Are 1883’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 email@example.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.
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