Tianjin Development Holdings Limited (HKG:882): Does The Earnings Decline Make It An Underperformer?
Assessing Tianjin Development Holdings Limited’s (HKG:882) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Tianjin Development Holdings is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its integrated utilities industry peers.
View our latest analysis for Tianjin Development Holdings
How Well Did 882 Perform?
882’s trailing twelve-month earnings (from 30 June 2018) of HK$426m has declined by -11% 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 -9.7%, indicating the rate at which 882 is growing has slowed down. Why is this? Let’s examine what’s going on with margins and whether the rest of the industry is experiencing the hit as well.
In terms of returns from investment, Tianjin Development Holdings has fallen short of achieving a 20% return on equity (ROE), recording 3.3% instead. Furthermore, its return on assets (ROA) of 1.3% is below the HK Integrated Utilities industry of 4.2%, indicating Tianjin Development Holdings’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Tianjin Development Holdings’s debt level, has declined over the past 3 years from 7.0% to 3.3%.
What does this mean?
Tianjin Development Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Usually companies that endure an extended period of reduction in earnings are undergoing some sort of reinvestment phase in order to keep up with the latest industry growth and disruption. I recommend you continue to research Tianjin Development Holdings to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 882’s future growth? Take a look at our free research report of analyst consensus for 882’s outlook.
Financial Health: Are 882’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.
