Examining HKR International Limited's (HKG:480) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 480's latest performance announced on 31 March 2019 and compare these figures to its longer term trend and industry movements.
Did 480 perform worse than its track record and industry?
480's trailing twelve-month earnings (from 31 March 2019) of HK$2.2b has declined by -4.3% 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 24%, indicating the rate at which 480 is growing has slowed down. Why is this? Let's examine what's going on with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, HKR International has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. However, its return on assets (ROA) of 6.7% exceeds the HK Real Estate industry of 3.1%, indicating HKR International has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for HKR International’s debt level, has increased over the past 3 years from 1.7% to 2.3%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 40% to 34% over the past 5 years.
What does this mean?
HKR 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 volatile earnings, can have many factors impacting its business. I suggest you continue to research HKR International to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 480’s future growth? Take a look at our free research report of analyst consensus for 480’s outlook.
- Financial Health: Are 480’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 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 email@example.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.