Measuring Huazhong In-Vehicle Holdings Company Limited's (HKG:6830) 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 6830's recent performance announced on 31 December 2018 and compare these figures to its historical trend and industry movements.
How Did 6830's Recent Performance Stack Up Against Its Past?
6830's trailing twelve-month earnings (from 31 December 2018) of CN¥139m has increased by 0.4% 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 20%, indicating the rate at which 6830 is growing has slowed down. To understand what's happening, let’s take a look at what’s going on with margins and if the entire industry is feeling the heat.
In terms of returns from investment, Huazhong In-Vehicle Holdings has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. Furthermore, its return on assets (ROA) of 5.7% is below the HK Auto Components industry of 8.2%, indicating Huazhong In-Vehicle Holdings's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Huazhong In-Vehicle Holdings’s debt level, has declined over the past 3 years from 16% to 13%.
What does this mean?
Huazhong In-Vehicle Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Huazhong In-Vehicle Holdings has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Huazhong In-Vehicle Holdings to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 6830’s future growth? Take a look at our free research report of analyst consensus for 6830’s outlook.
- Financial Health: Are 6830’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.
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