Understanding how Hong Kong Ferry (Holdings) Company Limited (HKG:50) is performing as a company requires looking at more than just a years' earnings. Today I will run you through a basic sense check to gain perspective on how Hong Kong Ferry (Holdings) is doing by comparing its latest earnings with its long-term trend as well as the performance of its real estate industry peers.
Did 50's recent earnings growth beat the long-term trend and the industry?
50's trailing twelve-month earnings (from 31 December 2018) of HK$345m has jumped 11% 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 50 is growing has accelerated. What's enabled this growth? Let's see if it is merely a result of an industry uplift, or if Hong Kong Ferry (Holdings) has seen some company-specific growth.
In terms of returns from investment, Hong Kong Ferry (Holdings) has fallen short of achieving a 20% return on equity (ROE), recording 5.6% instead. However, its return on assets (ROA) of 5.3% exceeds the HK Real Estate industry of 3.1%, indicating Hong Kong Ferry (Holdings) has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Hong Kong Ferry (Holdings)’s debt level, has increased over the past 3 years from 4.3% to 5.6%.
What does this mean?
Though Hong Kong Ferry (Holdings)'s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn't always indicative of a continued optimistic outlook. I recommend you continue to research Hong Kong Ferry (Holdings) to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 50’s future growth? Take a look at our free research report of analyst consensus for 50’s outlook.
- Financial Health: Are 50’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 firstname.lastname@example.org. 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.