Investors with a long-term horizong may find it valuable to assess China Lesso Group Holdings Limited's (SEHK:2128) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how China Lesso Group Holdings is currently performing.

See our latest analysis for China Lesso Group Holdings

Did 2128's recent earnings growth beat the long-term trend and the industry?

2128's trailing twelve-month earnings (from 30 June 2019) of CN¥2.7b has jumped 15% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 13%, indicating the rate at which 2128 is growing has accelerated. What's enabled this growth? Let's see if it is merely because of industry tailwinds, or if China Lesso Group Holdings has seen some company-specific growth.

In terms of returns from investment, China Lesso Group Holdings has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 8.5% exceeds the HK Building industry of 4.2%, indicating China Lesso Group Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for China Lesso Group Holdings’s debt level, has declined over the past 3 years from 19% to 15%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 42% to 80% over the past 5 years.

What does this mean?

While past data is useful, it doesn’t tell the whole story. While China Lesso Group Holdings has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research China Lesso Group Holdings to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 2128’s future growth? Take a look at our free research report of analyst consensus for 2128’s outlook.

2. Financial Health: Are 2128’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 30 June 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 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.

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.