Does China Wood Optimization (Holding) Limited's (HKG:1885) Recent Track Record Look Strong?
Analyzing China Wood Optimization (Holding) Limited's (SEHK:1885) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess 1885's recent performance announced on 30 June 2019 and compare these figures to its long-term trend and industry movements.
Check out our latest analysis for China Wood Optimization (Holding)
How Well Did 1885 Perform?
1885's trailing twelve-month earnings (from 30 June 2019) of CN¥72m has jumped 39% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -1.5%, indicating the rate at which 1885 is growing has accelerated. What's the driver of this growth? Let's see whether it is only owing to industry tailwinds, or if China Wood Optimization (Holding) has experienced some company-specific growth.
In terms of returns from investment, China Wood Optimization (Holding) has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 8.6% exceeds the HK Forestry industry of 5.3%, indicating China Wood Optimization (Holding) has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for China Wood Optimization (Holding)’s debt level, has declined over the past 3 years from 19% to 13%.
What does this mean?
Though China Wood Optimization (Holding)'s past data is helpful, it is only one aspect of my investment thesis. While China Wood Optimization (Holding) has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research China Wood Optimization (Holding) to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 1885’s future growth? Take a look at our free research report of analyst consensus for 1885’s outlook.
Financial Health: Are 1885’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 June 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.
