When Eagle Nice (International) Holdings Limited (SEHK:2368) released its most recent earnings update (30 September 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Eagle Nice (International) Holdings has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see 2368 has performed.
How 2368 fared against its long-term earnings performance and its industry
2368's trailing twelve-month earnings (from 30 September 2019) of HK$198m has jumped 14% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 14%, indicating the rate at which 2368 is growing has accelerated. How has it been able to do this? Let's take a look at if it is merely due to an industry uplift, or if Eagle Nice (International) Holdings has seen some company-specific growth.
In terms of returns from investment, Eagle Nice (International) Holdings 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 Luxury industry of 5.1%, indicating Eagle Nice (International) Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Eagle Nice (International) Holdings’s debt level, has increased over the past 3 years from 14% to 19%.
What does this mean?
Eagle Nice (International) Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Eagle Nice (International) Holdings 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 Eagle Nice (International) Holdings to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 2368’s future growth? Take a look at our free research report of analyst consensus for 2368’s outlook.
- Financial Health: Are 2368’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 September 2019. This may not be consistent with full year annual report figures.
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