Where Carpenter Tan Holdings Limited's (HKG:837) Earnings Growth Stands Against Its Industry
When Carpenter Tan Holdings Limited (SEHK:837) released its most recent earnings update (30 June 2019), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Carpenter Tan Holdings performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see 837 has performed.
View our latest analysis for Carpenter Tan Holdings
Did 837's recent performance beat its trend and industry?
837's trailing twelve-month earnings (from 30 June 2019) of CN¥123m has declined by -0.2% 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 -1.5%, indicating the rate at which 837 is growing has slowed down. What could be happening here? Let's examine what's going on with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Carpenter Tan Holdings has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 17% exceeds the HK Luxury industry of 5.3%, indicating Carpenter Tan Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Carpenter Tan Holdings’s debt level, has declined over the past 3 years from 18% to 14%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. I recommend you continue to research Carpenter Tan Holdings to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 837’s future growth? Take a look at our free research report of analyst consensus for 837’s outlook.
Financial Health: Are 837’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 30 June 2019. 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.
