For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at AEON Credit Service (Asia) Company Limited’s (HKG:900) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.

View our latest analysis for AEON Credit Service (Asia)

How 900 fared against its long-term earnings performance and its industry

900’s trailing twelve-month earnings (from 31 August 2018) of HK$429m has jumped 34% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 11%, indicating the rate at which 900 is growing has accelerated. What’s the driver of this growth? Well, let’s take a look at if it is only a result of an industry uplift, or if AEON Credit Service (Asia) has experienced some company-specific growth.

In terms of returns from investment, AEON Credit Service (Asia) has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 6.9% exceeds the HK Consumer Finance industry of 6.6%, indicating AEON Credit Service (Asia) has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for AEON Credit Service (Asia)’s debt level, has increased over the past 3 years from 7.0% to 9.5%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 143% to 92% over the past 5 years.

What does this mean?

AEON Credit Service (Asia)’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While AEON Credit Service (Asia) 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 AEON Credit Service (Asia) to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 900’s future growth? Take a look at our free research report of analyst consensus for 900’s outlook.

2. Financial Health: Are 900’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.