For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Haitian International Holdings Limited (SEHK:1882) useful as an attempt to give more color around how Haitian International Holdings is currently performing.

Check out our latest analysis for Haitian International Holdings

Was 1882 weak performance lately part of a long-term decline?

1882's trailing twelve-month earnings (from 31 December 2019) of CN¥1.8b has declined by -8.7% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 8.2%, indicating the rate at which 1882 is growing has slowed down. Why could this be happening? Let's examine what's going on with margins and whether the rest of the industry is experiencing the hit as well.

In terms of returns from investment, Haitian International Holdings has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 7.9% exceeds the HK Machinery industry of 4.9%, indicating Haitian International Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Haitian International Holdings’s debt level, has declined over the past 3 years from 17% to 14%.

What does this mean?

Though Haitian International Holdings's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I recommend you continue to research Haitian International Holdings to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 1882’s future growth? Take a look at our free research report of analyst consensus for 1882’s outlook.

2. Financial Health: Are 1882’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 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.

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. Thank you for reading.