In This Article:
In this commentary, I will examine Asia Orient Holdings Limited’s (HKG:214) latest earnings update (31 March 2018) and compare these figures against its performance over the past couple of years, as well as how the rest of the real estate industry performed. As an investor, I find it beneficial to assess 214’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.
See our latest analysis for Asia Orient Holdings
Was 214 weak performance lately part of a long-term decline?
214’s trailing twelve-month earnings (from 31 March 2018) of HK$814m has declined by -19% 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 -6.4%, indicating the rate at which 214 is growing has slowed down. What could be happening here? Well, let’s look at what’s transpiring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, Asia Orient Holdings has fallen short of achieving a 20% return on equity (ROE), recording 6.3% instead. Furthermore, its return on assets (ROA) of 2.8% is below the HK Real Estate industry of 3.8%, indicating Asia Orient Holdings’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Asia Orient Holdings’s debt level, has increased over the past 3 years from 2.8% to 3.3%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. You should continue to research Asia Orient Holdings to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for 214’s future growth? Take a look at our free research report of analyst consensus for 214’s outlook.
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Financial Health: Are 214’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.
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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 March 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.