Assessing Qingling Motors Co., Ltd.'s (HKG:1122) performance as a company requires looking at more than just a years' earnings data. Below, I will run you through a simple sense check to build perspective on how Qingling Motors is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its auto industry peers.

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Check out our latest analysis for Qingling Motors

How Well Did 1122 Perform?

1122's trailing twelve-month earnings (from 31 December 2018) of CN¥454m 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 2.0%, indicating the rate at which 1122 is growing has slowed down. Why is this? Well, let’s take a look at what’s occurring with margins and whether the entire industry is facing the same headwind.

In terms of returns from investment, Qingling Motors has fallen short of achieving a 20% return on equity (ROE), recording 5.7% instead. Furthermore, its return on assets (ROA) of 2.4% is below the HK Auto industry of 3.0%, indicating Qingling Motors's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Qingling Motors’s debt level, has declined over the past 3 years from 5.1% to 3.8%.

What does this mean?

Qingling Motors's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. You should continue to research Qingling Motors to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 1122’s future growth? Take a look at our free research report of analyst consensus for 1122’s outlook.

2. Financial Health: Are 1122’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 2018. 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.