Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Haier Electronics Group Co., Ltd.'s (SEHK:1169) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
How Did 1169's Recent Performance Stack Up Against Its Past?
1169's trailing twelve-month earnings (from 31 December 2019) of CN¥4.0b has jumped 16% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 11%, indicating the rate at which 1169 is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is merely attributable to industry tailwinds, or if Haier Electronics Group has experienced some company-specific growth.
In terms of returns from investment, Haier Electronics Group has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 7.2% exceeds the HK Consumer Durables industry of 5.5%, indicating Haier Electronics Group has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Haier Electronics Group’s debt level, has declined over the past 3 years from 15% to 11%.
What does this mean?
Though Haier Electronics Group's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Haier Electronics Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Haier Electronics Group to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 1169’s future growth? Take a look at our free research report of analyst consensus for 1169’s outlook.
- Financial Health: Are 1169’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 December 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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