Yuexiu Transport Infrastructure Limited (HKG:1052): Has Recent Earnings Growth Beaten Long-Term Trend?
For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Yuexiu Transport Infrastructure Limited's (HKG:1052) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
See our latest analysis for Yuexiu Transport Infrastructure
Could 1052 beat the long-term trend and outperform its industry?
1052's trailing twelve-month earnings (from 31 December 2018) of CN¥1.1b has jumped 11% 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 15%, indicating the rate at which 1052 is growing has slowed down. Why could this be happening? Well, let’s take a look at 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, Yuexiu Transport Infrastructure has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 6.0% exceeds the HK Infrastructure industry of 5.7%, indicating Yuexiu Transport Infrastructure has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Yuexiu Transport Infrastructure’s debt level, has increased over the past 3 years from 5.9% to 8.6%.
What does this mean?
Though Yuexiu Transport Infrastructure'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 Yuexiu Transport Infrastructure to get a better picture of the stock by looking at:
Financial Health: Are 1052’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 1052 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 1052 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 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.
