After reading Vicplas International Ltd's (SGX:569) most recent earnings announcement (31 July 2019), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Vicplas International's performance has been impacted by industry movements. In this article I briefly touch on my key findings.
Did 569 beat its long-term earnings growth trend and its industry?
569's trailing twelve-month earnings (from 31 July 2019) of S$4.2m has jumped 44% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 13%, indicating the rate at which 569 is growing has accelerated. What's the driver of this growth? Well, let’s take a look at whether it is solely owing to an industry uplift, or if Vicplas International has seen some company-specific growth.
In terms of returns from investment, Vicplas International has fallen short of achieving a 20% return on equity (ROE), recording 6.9% instead. Furthermore, its return on assets (ROA) of 5.5% is below the SG Medical Equipment industry of 7.2%, indicating Vicplas International's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Vicplas International’s debt level, has declined over the past 3 years from 13% to 6.8%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 2.1% to 14% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Vicplas 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 Vicplas International to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 569’s future growth? Take a look at our free research report of analyst consensus for 569’s outlook.
- Financial Health: Are 569’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 July 2019. 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 email@example.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.