Chu Kong Shipping Enterprises (Group) Company Limited (HKG:560): Does The -11% Earnings Drop Reflect A Longer Term Trend?
Assessing Chu Kong Shipping Enterprises (Group) Company Limited’s (HKG:560) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 560’s recent performance announced on 30 June 2018 and evaluate these figures to its longer term trend and industry movements.
Check out our latest analysis for Chu Kong Shipping Enterprises (Group)
Was 560’s recent earnings decline indicative of a tough track record?
560’s trailing twelve-month earnings (from 30 June 2018) of HK$286m has declined by -11% 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 11%, indicating the rate at which 560 is growing has slowed down. Why is this? Well, let’s take a look at what’s going on with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Chu Kong Shipping Enterprises (Group) has fallen short of achieving a 20% return on equity (ROE), recording 8.5% instead. However, its return on assets (ROA) of 6.0% exceeds the HK Shipping industry of 4.7%, indicating Chu Kong Shipping Enterprises (Group) has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Chu Kong Shipping Enterprises (Group)’s debt level, has declined over the past 3 years from 7.6% to 4.7%.
What does this mean?
Chu Kong Shipping Enterprises (Group)’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I recommend you continue to research Chu Kong Shipping Enterprises (Group) to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 560’s future growth? Take a look at our free research report of analyst consensus for 560’s outlook.
Financial Health: Are 560’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.
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 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.