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Shimao Property Holdings Limited's (HKG:813) Earnings Grew 13%, Did It Beat Long-Term Trend?

Simply Wall St

Understanding how Shimao Property Holdings Limited (HKG:813) 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 Shimao Property Holdings is doing by comparing its latest earnings with its long-term trend as well as the performance of its real estate industry peers.

View our latest analysis for Shimao Property Holdings

How Well Did 813 Perform?

813's trailing twelve-month earnings (from 31 December 2018) of CN¥8.8b has jumped 13% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 0.3%, indicating the rate at which 813 is growing has accelerated. What's the driver of this growth? Let's see whether it is merely a result of industry tailwinds, or if Shimao Property Holdings has seen some company-specific growth.

SEHK:813 Income Statement, April 18th 2019

In terms of returns from investment, Shimao Property Holdings has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 1.9% is below the HK Real Estate industry of 3.3%, indicating Shimao Property Holdings's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Shimao Property Holdings’s debt level, has increased over the past 3 years from 8.6% to 11%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 107% to 104% over the past 5 years.

What does this mean?

Shimao Property Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Shimao Property Holdings has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Shimao Property Holdings to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 813’s future growth? Take a look at our free research report of analyst consensus for 813’s outlook.
  2. Financial Health: Are 813’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 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 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.