Yahoo Finance With 2.8% Earnings Growth, Did Hengan International Group Company Limited (HKG:1044) Outperform The Industry?
When Hengan International Group Company Limited (SEHK:1044) announced its most recent earnings (31 December 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Hengan International Group has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I've summarized the key takeaways on how I see 1044 has performed.
Check out our latest analysis for Hengan International Group
How Did 1044's Recent Performance Stack Up Against Its Past?
1044's trailing twelve-month earnings (from 31 December 2019) of CN¥3.9b has increased by 2.8% 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 4.7%, indicating the rate at which 1044 is growing has slowed down. What could be happening here? Well, let's look at what's transpiring with margins and whether the entire industry is feeling the heat.
In terms of returns from investment, Hengan International Group 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 8.6% exceeds the HK Personal Products industry of 6.3%, indicating Hengan International Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Hengan International Group’s debt level, has increased over the past 3 years from 25% to 25%.
What does this mean?
Hengan International Group's track record can be a valuable insight into its earnings performance, but it certainly 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? You should continue to research Hengan International Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 1044’s future growth? Take a look at our free research report of analyst consensus for 1044’s outlook.
Financial Health: Are 1044’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 December 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.
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