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When SIIC Environment Holdings Ltd. (SGX:BHK) announced its most recent earnings (30 September 2019), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how SIIC Environment 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 BHK has performed.
View our latest analysis for SIIC Environment Holdings
How Well Did BHK Perform?
BHK's trailing twelve-month earnings (from 30 September 2019) of CN¥621m has jumped 12% 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 16%, indicating the rate at which BHK is growing has slowed down. What could be happening here? Well, let's look at what's going on with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, SIIC Environment Holdings has fallen short of achieving a 20% return on equity (ROE), recording 6.9% instead. Furthermore, its return on assets (ROA) of 4.0% is below the SG Water Utilities industry of 4.7%, indicating SIIC Environment Holdings's are utilized less efficiently. However, its return on capital (ROC), which also accounts for SIIC Environment Holdings’s debt level, has increased over the past 3 years from 4.7% to 5.8%.
What does this mean?
SIIC Environment 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 SIIC Environment Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research SIIC Environment 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 BHK’s future growth? Take a look at our free research report of analyst consensus for BHK’s outlook.
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Financial Health: Are BHK’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 30 September 2019. This may not be consistent with full year annual report figures.
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.
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