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Does Fu Shou Yuan International Group Limited's (HKG:1448) Past Performance Indicate A Stronger Future?

Simply Wall St

Examining Fu Shou Yuan International Group Limited's (SEHK:1448) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 1448's latest performance announced on 30 June 2019 and weigh these figures against its longer term trend and industry movements.

View our latest analysis for Fu Shou Yuan International Group

How Well Did 1448 Perform?

1448's trailing twelve-month earnings (from 30 June 2019) of CN¥523m has jumped 16% 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 18%, indicating the rate at which 1448 is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and whether the rest of the industry is facing the same headwind.

SEHK:1448 Income Statement, October 17th 2019

In terms of returns from investment, Fu Shou Yuan International Group has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 8.6% exceeds the HK Consumer Services industry of 7.2%, indicating Fu Shou Yuan International Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Fu Shou Yuan International Group’s debt level, has increased over the past 3 years from 13% to 17%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 4.1% to 3.9% over the past 5 years.

What does this mean?

Fu Shou Yuan International Group's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Fu Shou Yuan International Group 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 Fu Shou Yuan International Group to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 1448’s future growth? Take a look at our free research report of analyst consensus for 1448’s outlook.
  2. Financial Health: Are 1448’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.