In This Article:
After reading UOB-Kay Hian Holdings Limited’s (SGX:U10) most recent earnings announcement (30 June 2018), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
See our latest analysis for UOB-Kay Hian Holdings
How Well Did U10 Perform?
U10’s trailing twelve-month earnings (from 30 June 2018) of S$86m has jumped 37% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -4.0%, indicating the rate at which U10 is growing has accelerated. What’s enabled this growth? Let’s take a look at if it is merely owing to an industry uplift, or if UOB-Kay Hian Holdings has experienced some company-specific growth.
In terms of returns from investment, UOB-Kay Hian Holdings has fallen short of achieving a 20% return on equity (ROE), recording 6.1% instead. Furthermore, its return on assets (ROA) of 2.5% is below the SG Capital Markets industry of 5.4%, indicating UOB-Kay Hian Holdings’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for UOB-Kay Hian Holdings’s debt level, has declined over the past 3 years from 7.8% to 7.0%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 58% to 73% over the past 5 years.
What does this mean?
Though UOB-Kay Hian Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as UOB-Kay Hian Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research UOB-Kay Hian Holdings to get a more holistic view of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for U10’s future growth? Take a look at our free research report of analyst consensus for U10’s outlook.
-
Financial Health: Are U10’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.