Does Shanghai Industrial Urban Development Group Limited's (HKG:563) Recent Track Record Look Strong?
Measuring Shanghai Industrial Urban Development Group Limited's (SEHK:563) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 563's recent performance announced on 31 December 2019 and compare these figures to its historical trend and industry movements.
See our latest analysis for Shanghai Industrial Urban Development Group
Did 563 beat its long-term earnings growth trend and its industry?
563's trailing twelve-month earnings (from 31 December 2019) of HK$600m has increased by 4.7% 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 8.4%, indicating the rate at which 563 is growing has slowed down. What could be happening here? Well, let's examine what's transpiring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Shanghai Industrial Urban Development Group has fallen short of achieving a 20% return on equity (ROE), recording 5.1% instead. Furthermore, its return on assets (ROA) of 1.9% is below the HK Real Estate industry of 2.9%, indicating Shanghai Industrial Urban Development Group's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Shanghai Industrial Urban Development Group’s debt level, has increased over the past 3 years from 1.1% to 7.9%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 101% to 70% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Shanghai Industrial Urban Development Group 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 Shanghai Industrial Urban Development Group to get a more holistic view of the stock by looking at:
Financial Health: Are 563’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.
Valuation: What is 563 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 563 is currently mispriced by the market.
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 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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