Assessing CT Environmental Group Limited’s (HKG:1363) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 1363’s recent performance announced on 30 June 2018 and evaluate these figures to its long-term trend and industry movements.

Check out our latest analysis for CT Environmental Group

Was 1363’s recent earnings decline worse than the long-term trend and the industry?

1363’s trailing twelve-month earnings (from 30 June 2018) of HK$602m has declined by -5.6% 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 19%, indicating the rate at which 1363 is growing has slowed down. Why is this? Well, let’s look at what’s going on with margins and if the whole industry is facing the same headwind.

In terms of returns from investment, CT Environmental Group has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 8.0% exceeds the HK Water Utilities industry of 4.8%, indicating CT Environmental Group has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for CT Environmental Group’s debt level, has declined over the past 3 years from 16% to 13%.

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 impacting its business. You should continue to research CT Environmental Group to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 1363’s future growth? Take a look at our free research report of analyst consensus for 1363’s outlook.

2. Financial Health: Are 1363’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 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.