In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
When L.K. Technology Holdings Limited (HKG:558) released its most recent earnings update (30 September 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how L.K. Technology Holdings performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see 558 has performed.
View our latest analysis for L.K. Technology Holdings
How Did 558’s Recent Performance Stack Up Against Its Past?
558’s trailing twelve-month earnings (from 30 September 2018) of HK$216m has jumped 11% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 30%, indicating the rate at which 558 is growing has slowed down. To understand what’s happening, let’s look at what’s occurring with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, L.K. Technology Holdings has fallen short of achieving a 20% return on equity (ROE), recording 11% instead. However, its return on assets (ROA) of 5.3% exceeds the HK Machinery industry of 4.6%, indicating L.K. Technology Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for L.K. Technology Holdings’s debt level, has increased over the past 3 years from 3.3% to 11%.
What does this mean?
Though L.K. Technology Holdings’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research L.K. Technology Holdings to get a better picture of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for 558’s future growth? Take a look at our free research report of analyst consensus for 558’s outlook.
-
Financial Health: Are 558’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 September 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.