Jujiang Construction Group Co., Ltd.'s (HKG:1459) Earnings Grew 38%, Did It Beat Long-Term Trend?
Understanding Jujiang Construction Group Co., Ltd.'s (HKG:1459) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Jujiang Construction Group is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.
See our latest analysis for Jujiang Construction Group
Were 1459's earnings stronger than its past performances and the industry?
1459's trailing twelve-month earnings (from 31 December 2018) of CN¥171m has jumped 38% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 17%, indicating the rate at which 1459 is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is only owing to an industry uplift, or if Jujiang Construction Group has experienced some company-specific growth.
In terms of returns from investment, Jujiang Construction Group has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. Furthermore, its return on assets (ROA) of 4.2% is below the HK Construction industry of 5.7%, indicating Jujiang Construction Group's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Jujiang Construction Group’s debt level, has increased over the past 3 years from 21% to 22%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 98% to 32% over the past 5 years.
What does this mean?
Though Jujiang Construction Group's past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Jujiang Construction Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 1459’s future growth? Take a look at our free research report of analyst consensus for 1459’s outlook.
Financial Health: Are 1459’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 31 December 2018. This may not be consistent with full year annual report figures.
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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.
