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Want To Invest In Tianneng Power International Limited (HKG:819)? Here's How It Performed Lately

Simply Wall St

Examining how Tianneng Power International Limited (SEHK:819) is performing as a company requires looking at more than just a years' earnings. Below, I will run you through a simple sense check to build perspective on how Tianneng Power International is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its auto components industry peers.

View our latest analysis for Tianneng Power International

Were 819's earnings stronger than its past performances and the industry?

819's trailing twelve-month earnings (from 30 June 2019) of CN¥1.3b has increased by 4.1% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 43%, indicating the rate at which 819 is growing has slowed down. What could be happening here? Well, let's examine what's occurring with margins and whether the whole industry is feeling the heat.

SEHK:819 Income Statement, November 30th 2019

In terms of returns from investment, Tianneng Power International has invested its equity funds well leading to a 22% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 7.7% exceeds the HK Auto Components industry of 7.6%, indicating Tianneng Power International has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Tianneng Power International’s debt level, has increased over the past 3 years from 20% to 21%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 127% to 60% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While Tianneng Power International has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Tianneng Power International to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 819’s future growth? Take a look at our free research report of analyst consensus for 819’s outlook.
  2. Financial Health: Are 819’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 30 June 2019. This may not be consistent with full year annual report figures.

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.

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. Thank you for reading.