Analyzing Vantage International (Holdings) Limited's (SEHK:15) 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 15's recent performance announced on 30 September 2019 and compare these figures to its long-term trend and industry movements.
Did 15's recent earnings growth beat the long-term trend and the industry?
15's trailing twelve-month earnings (from 30 September 2019) of HK$525m has increased by 0.07% 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 19%, indicating the rate at which 15 is growing has slowed down. What could be happening here? Well, let's examine what's transpiring with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Vantage International (Holdings) has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 8.4% exceeds the HK Construction industry of 5.6%, indicating Vantage International (Holdings) has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Vantage International (Holdings)’s debt level, has increased over the past 3 years from 9.8% to 11%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 42% to 29% over the past 5 years.
What does this mean?
Vantage International (Holdings)'s track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. 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 Vantage International (Holdings) to get a better picture of the stock by looking at:
- Financial Health: Are 15’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 15 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 15 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 30 September 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 email@example.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.