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Interested In Chow Sang Sang Holdings International Limited (HKG:116)? Here's How It Performed Recently

Simply Wall St

After reading Chow Sang Sang Holdings International Limited's (SEHK:116) most recent earnings announcement (30 June 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.

View our latest analysis for Chow Sang Sang Holdings International

Was 116 weak performance lately part of a long-term decline?

116's trailing twelve-month earnings (from 30 June 2019) of HK$1.0b has declined by -6.3% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -3.7%, indicating the rate at which 116 is growing has slowed down. Why is this? Well, let's look at what's transpiring with margins and whether the entire industry is experiencing the hit as well.

SEHK:116 Income Statement, October 24th 2019

In terms of returns from investment, Chow Sang Sang Holdings International has fallen short of achieving a 20% return on equity (ROE), recording 9.4% instead. However, its return on assets (ROA) of 6.1% exceeds the HK Luxury industry of 5.3%, indicating Chow Sang Sang Holdings International has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Chow Sang Sang Holdings International’s debt level, has increased over the past 3 years from 11% to 12%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 44% to 21% over the past 5 years.

What does this mean?

Chow Sang Sang Holdings International's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I recommend you continue to research Chow Sang Sang Holdings International to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 116’s future growth? Take a look at our free research report of analyst consensus for 116’s outlook.
  2. Financial Health: Are 116’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.