Measuring Hengan International Group Company Limited’s (HKG:1044) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess 1044’s recent performance announced on 30 June 2018 and compare these figures to its historical trend and industry movements.
How Did 1044’s Recent Performance Stack Up Against Its Past?
1044’s trailing twelve-month earnings (from 30 June 2018) of CN¥3.9b has increased by 9.5% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 5.8%, indicating the rate at which 1044 is growing has accelerated. What’s enabled this growth? Well, let’s take a look at whether it is only a result of industry tailwinds, or if Hengan International Group has seen some company-specific growth.
In terms of returns from investment, Hengan International Group has invested its equity funds well leading to a 23% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 10% exceeds the HK Personal Products industry of 6.3%, indicating Hengan International Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Hengan International Group’s debt level, has increased over the past 3 years from 23% to 24%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 125% to 107% over the past 5 years.
What does this mean?
Though Hengan International Group’s past data is helpful, it is only one aspect of my investment thesis. While Hengan 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 suggest you continue to research Hengan International Group to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 1044’s future growth? Take a look at our free research report of analyst consensus for 1044’s outlook.
- Financial Health: Are 1044’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 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.