Sinotrans Shipping Limited (HKG:368): Did It Outperform The Industry?
Examining Sinotrans Shipping Limited’s (HKG:368) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 368’s latest performance announced on 30 June 2018 and weight these figures against its longer term trend and industry movements.
View our latest analysis for Sinotrans Shipping
Did 368’s recent earnings growth beat the long-term trend and the industry?
368 recently turned a profit of US$64.28m (most recent trailing twelve-months) compared to its average loss of -US$21.52m over the past five years.
In the past few years, Sinotrans Shipping top-line expansion has outpaced earnings and the growth rate of expenses. Though this has caused a margin contraction, it has lessened Sinotrans Shipping’s earnings contraction. Eyeballing growth from a sector-level, the HK shipping industry has been enduring some headwinds in the past twelve months, leading to an average earnings drop of -11.46%. This is a momentous change, given that the industry has been delivering a positive rate of 8.88%, on average, over the past five years. This growth is a median of profitable companies of 5 Shipping companies in HK including COSCO SHIPPING Energy Transportation, Chu Kong Shipping Enterprises (Group) and COSCO SHIPPING Development. This suggests that whatever near-term headwind the industry is facing, the impact on Sinotrans Shipping has been softer relative to its peers.
In terms of returns from investment, Sinotrans Shipping has fallen short of achieving a 20% return on equity (ROE), recording 3.92% instead. Furthermore, its return on assets (ROA) of 2.32% is below the HK Shipping industry of 2.82%, indicating Sinotrans Shipping’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Sinotrans Shipping’s debt level, has increased over the past 3 years from 3.17% to 3.71%.
What does this mean?
Sinotrans Shipping’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. I suggest you continue to research Sinotrans Shipping to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 368’s future growth? Take a look at our free research report of analyst consensus for 368’s outlook.
Financial Health: Are 368’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 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
