Examining Ascendas India Trust’s (SGX:CY6U) 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 CY6U’s latest performance announced on 31 March 2018 and weight these figures against its longer term trend and industry movements. See our latest analysis for Ascendas India Trust
Were CY6U’s earnings stronger than its past performances and the industry?
CY6U’s trailing twelve-month earnings (from 31 March 2018) of S$191.31m has jumped 37.47% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 25.06%, indicating the rate at which CY6U is growing has accelerated. What’s enabled this growth? Well, let’s take a look at if it is only a result of industry tailwinds, or if Ascendas India Trust has seen some company-specific growth.
Over the last few years, Ascendas India Trust expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the SG real estate industry has been growing, albeit, at a unexciting single-digit rate of 2.36% in the previous twelve months, . This is a change from a volatile drop of -2.65% in the past couple of years. This means any recent headwind the industry is facing, Ascendas India Trust is less exposed compared to its peers.
In terms of returns from investment, Ascendas India Trust has invested its equity funds well leading to a 20.06% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11.43% exceeds the SG Real Estate industry of 3.67%, indicating Ascendas India Trust has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Ascendas India Trust’s debt level, has declined over the past 3 years from 6.31% to 4.54%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 31.80% to 51.38% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Ascendas India Trust to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CY6U’s future growth? Take a look at our free research report of analyst consensus for CY6U’s outlook.
- Financial Health: Is CY6U’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 2018. This may not be consistent with full year annual report figures.
To help readers see pass 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.