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Does Shimao Property Holdings Limited's (HKG:813) Recent Track Record Look Strong?

Simply Wall St

When Shimao Property Holdings Limited (SEHK:813) released its most recent earnings update (30 June 2019), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Shimao Property Holdings's average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not 813 actually performed well. Below is a quick commentary on how I see 813 has performed.

Check out our latest analysis for Shimao Property Holdings

Were 813's earnings stronger than its past performances and the industry?

813's trailing twelve-month earnings (from 30 June 2019) of CN¥9.7b has jumped 17% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.2%, indicating the rate at which 813 is growing has accelerated. What's enabled this growth? Let's see if it is merely attributable to industry tailwinds, or if Shimao Property Holdings has seen some company-specific growth.

SEHK:813 Income Statement, October 22nd 2019

In terms of returns from investment, Shimao Property Holdings has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 1.8% is below the HK Real Estate industry of 2.9%, indicating Shimao Property Holdings's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Shimao Property Holdings’s debt level, has increased over the past 3 years from 7.7% to 12%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 106% to 104% over the past 5 years.

What does this mean?

Shimao Property Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Shimao Property Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Shimao Property Holdings to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 813’s future growth? Take a look at our free research report of analyst consensus for 813’s outlook.
  2. Financial Health: Are 813’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.