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Assessing Beijing Digital Telecom Co., Ltd.'s (HKG:6188) 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 6188's recent performance announced on 31 December 2018 and evaluate these figures to its long-term trend and industry movements.
View our latest analysis for Beijing Digital Telecom
Did 6188 perform worse than its track record and industry?
6188's trailing twelve-month earnings (from 31 December 2018) of CN¥314m has declined by -2.6% 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 2.6%, indicating the rate at which 6188 is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s occurring with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Beijing Digital Telecom has fallen short of achieving a 20% return on equity (ROE), recording 8.0% instead. Furthermore, its return on assets (ROA) of 5.7% is below the HK Specialty Retail industry of 6.5%, indicating Beijing Digital Telecom's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Beijing Digital Telecom’s debt level, has declined over the past 3 years from 18% to 13%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Usually companies that experience a drawn out period of reduction in earnings are going through some sort of reinvestment phase in order to keep up with the latest industry growth and disruption. I suggest you continue to research Beijing Digital Telecom 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 6188’s future growth? Take a look at our free research report of analyst consensus for 6188’s outlook.
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Financial Health: Are 6188’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 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.