Cabbeen Fashion Limited's (HKG:2030) Earnings Grew 5.0%, Did It Beat Long-Term Trend?
Today I will examine Cabbeen Fashion Limited's (HKG:2030) latest earnings update (31 December 2018) and compare these figures against its performance over the past couple of years, in addition to how the rest of 2030's industry performed. As a long-term investor, I find it useful to analyze the company's trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.
See our latest analysis for Cabbeen Fashion
Could 2030 beat the long-term trend and outperform its industry?
2030's trailing twelve-month earnings (from 31 December 2018) of CN¥212m has increased by 5.0% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.6%, indicating the rate at which 2030 is growing has accelerated. What's the driver of this growth? Let's see if it is only a result of an industry uplift, or if Cabbeen Fashion has experienced some company-specific growth.
In terms of returns from investment, Cabbeen Fashion has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 10% exceeds the HK Luxury industry of 5.7%, indicating Cabbeen Fashion has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Cabbeen Fashion’s debt level, has declined over the past 3 years from 42% to 21%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 15% to 24% over the past 5 years.
What does this mean?
While past data is useful, it 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? I suggest you continue to research Cabbeen Fashion to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 2030’s future growth? Take a look at our free research report of analyst consensus for 2030’s outlook.
Financial Health: Are 2030’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.
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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.
