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When Kingboard Holdings Limited (HKG:148) released its most recent earnings update (31 December 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Kingboard 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 148 has performed.
Check out our latest analysis for Kingboard Holdings
How 148 fared against its long-term earnings performance and its industry
148's trailing twelve-month earnings (from 31 December 2018) of HK$6.1b has increased by 8.6% 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 24%, indicating the rate at which 148 is growing has slowed down. What could be happening here? Well, let’s take a look at what’s going on with margins and whether the rest of the industry is facing the same headwind.
In terms of returns from investment, Kingboard Holdings has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 7.0% exceeds the HK Electronic industry of 5.0%, indicating Kingboard Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Kingboard Holdings’s debt level, has increased over the past 3 years from 3.7% to 9.4%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 58% to 50% over the past 5 years.
What does this mean?
Kingboard Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Kingboard Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Kingboard Holdings to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for 148’s future growth? Take a look at our free research report of analyst consensus for 148’s outlook.
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Financial Health: Are 148’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.