Does Ausnutria Dairy Corporation Ltd's (HKG:1717) Past Performance Indicate A Stronger Future?
For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Ausnutria Dairy Corporation Ltd's (SEHK:1717) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Check out our latest analysis for Ausnutria Dairy
Did 1717's recent earnings growth beat the long-term trend and the industry?
1717's trailing twelve-month earnings (from 30 September 2019) of CN¥804m has jumped 48% 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 48%, indicating the rate at which 1717 is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Ausnutria Dairy has invested its equity funds well leading to a 23% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11% exceeds the HK Food industry of 5.8%, indicating Ausnutria Dairy has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Ausnutria Dairy’s debt level, has increased over the past 3 years from 5.8% to 25%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 39% to 32% over the past 5 years.
What does this mean?
Though Ausnutria Dairy's past data is helpful, it is only one aspect of my investment thesis. While Ausnutria Dairy has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Ausnutria Dairy to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 1717’s future growth? Take a look at our free research report of analyst consensus for 1717’s outlook.
Financial Health: Are 1717’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 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 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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