Measuring North Asia Strategic Holdings Limited's (SEHK:8080) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess 8080's recent performance announced on 30 September 2019 and compare these figures to its historical trend and industry movements.
Did 8080 perform worse than its track record and industry?
8080's trailing twelve-month earnings (from 30 September 2019) of HK$105m has declined by -16% 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 48%, indicating the rate at which 8080 is growing has slowed down. What could be happening here? Well, let's look at what's transpiring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, North Asia Strategic Holdings has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. Furthermore, its return on assets (ROA) of 3.8% is below the HK Trade Distributors industry of 4.6%, indicating North Asia Strategic Holdings's are utilized less efficiently. However, its return on capital (ROC), which also accounts for North Asia Strategic Holdings’s debt level, has increased over the past 3 years from 0.9% to 12%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 5.5% to 4.6% over the past 5 years.
What does this mean?
North Asia Strategic Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors affecting its business. You should continue to research North Asia Strategic Holdings to get a better picture of the stock by looking at:
- Financial Health: Are 8080’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.
- Valuation: What is 8080 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 8080 is currently mispriced by the market.
- 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 September 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 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.
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