U.S. Markets open in 2 hrs 30 mins

Interested In Easyknit International Holdings Limited (HKG:1218)? Here's What Its Recent Performance Looks Like

Simply Wall St

For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Easyknit International Holdings Limited (SEHK:1218) useful as an attempt to give more color around how Easyknit International Holdings is currently performing.

View our latest analysis for Easyknit International Holdings

How 1218 fared against its long-term earnings performance and its industry

1218's trailing twelve-month earnings (from 31 March 2019) of HK$316m has increased by 6.3% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -4.5%, indicating the rate at which 1218 is growing has accelerated. What's enabled this growth? Well, let’s take a look at if it is solely attributable to industry tailwinds, or if Easyknit International Holdings has seen some company-specific growth.

SEHK:1218 Income Statement, September 30th 2019

In terms of returns from investment, Easyknit International Holdings has fallen short of achieving a 20% return on equity (ROE), recording 8.9% instead. However, its return on assets (ROA) of 6.4% exceeds the HK Real Estate industry of 2.8%, indicating Easyknit International Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Easyknit International Holdings’s debt level, has increased over the past 3 years from 3.8% to 5.9%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 51% to 39% over the past 5 years.

What does this mean?

Easyknit International Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Easyknit 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 suggest you continue to research Easyknit International Holdings to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 1218’s future growth? Take a look at our free research report of analyst consensus for 1218’s outlook.
  2. Financial Health: Are 1218’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 31 March 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.