Was Beijing Enterprises Clean Energy Group Limited's (HKG:1250) Earnings Decline Part Of A Broader Industry Downturn?
When Beijing Enterprises Clean Energy Group Limited (HKG:1250) announced its most recent earnings (31 December 2018), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Beijing Enterprises Clean Energy Group performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see 1250 has performed.
Check out our latest analysis for Beijing Enterprises Clean Energy Group
Despite a decline, did 1250 underperform the long-term trend and the industry?
1250's trailing twelve-month earnings (from 31 December 2018) of HK$1.3b has declined by -19% 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 66%, indicating the rate at which 1250 is growing has slowed down. Why could this be happening? Well, let's look at what's transpiring with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Beijing Enterprises Clean Energy Group has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 4.9% exceeds the HK Renewable Energy industry of 4.6%, indicating Beijing Enterprises Clean Energy Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Beijing Enterprises Clean Energy Group’s debt level, has increased over the past 3 years from 2.1% to 7.1%.
What does this mean?
Though Beijing Enterprises Clean Energy Group's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. You should continue to research Beijing Enterprises Clean Energy Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 1250’s future growth? Take a look at our free research report of analyst consensus for 1250’s outlook.
Financial Health: Are 1250’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 2018. 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 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. Thank you for reading.
