In This Article:
For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Beijing Capital International Airport Company Limited's (SEHK:694) 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 Beijing Capital International Airport
Was 694's weak performance lately a part of a long-term decline?
694's trailing twelve-month earnings (from 30 June 2019) of CN¥2.7b has declined by -5.2% 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 17%, indicating the rate at which 694 is growing has slowed down. What could be happening here? Let's examine what's going on with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Beijing Capital International Airport has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 8.1% exceeds the HK Infrastructure industry of 6.3%, indicating Beijing Capital International Airport has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Beijing Capital International Airport’s debt level, has increased over the past 3 years from 11% to 14%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 77% to 14% over the past 5 years.
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 influencing its business. You should continue to research Beijing Capital International Airport 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 694’s future growth? Take a look at our free research report of analyst consensus for 694’s outlook.
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Financial Health: Are 694’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 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.
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