Did Regina Miracle International (Holdings) Limited's (HKG:2199) Recent Earnings Growth Beat The Trend?

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After reading Regina Miracle International (Holdings) Limited's (HKG:2199) most recent earnings announcement (31 March 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 tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.

Check out our latest analysis for Regina Miracle International (Holdings)

Did 2199's recent earnings growth beat the long-term trend and the industry?

2199's trailing twelve-month earnings (from 31 March 2019) of HK$282m has jumped 18% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -7.7%, indicating the rate at which 2199 is growing has accelerated. How has it been able to do this? Let's see if it is only owing to industry tailwinds, or if Regina Miracle International (Holdings) has seen some company-specific growth.

SEHK:2199 Income Statement, June 26th 2019
SEHK:2199 Income Statement, June 26th 2019

In terms of returns from investment, Regina Miracle International (Holdings) has fallen short of achieving a 20% return on equity (ROE), recording 9.7% instead. Furthermore, its return on assets (ROA) of 5.4% is below the HK Luxury industry of 5.7%, indicating Regina Miracle International (Holdings)'s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Regina Miracle International (Holdings)’s debt level, has declined over the past 3 years from 20% to 7.1%.

What does this mean?

Regina Miracle International (Holdings)'s track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Regina Miracle International (Holdings) 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 Regina Miracle International (Holdings) to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 2199’s future growth? Take a look at our free research report of analyst consensus for 2199’s outlook.

  2. Financial Health: Are 2199’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.

  3. 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 March 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 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.

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