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For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at ANTA Sports Products Limited's (HKG:2020) 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.
Commentary On 2020's Past Performance
2020's trailing twelve-month earnings (from 31 December 2018) of CN¥4.1b has jumped 33% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 21%, indicating the rate at which 2020 is growing has accelerated. What's the driver of this growth? Let's take a look at whether it is merely owing to industry tailwinds, or if ANTA Sports Products has seen some company-specific growth.
In terms of returns from investment, ANTA Sports Products has invested its equity funds well leading to a 26% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 16% exceeds the HK Luxury industry of 5.9%, indicating ANTA Sports Products has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for ANTA Sports Products’s debt level, has increased over the past 3 years from 30% to 34%.
What does this mean?
While past data is useful, it 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? You should continue to research ANTA Sports Products to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 2020’s future growth? Take a look at our free research report of analyst consensus for 2020’s outlook.
- Financial Health: Are 2020’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 2018. 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 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. Thank you for reading.