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Analyzing Yuexiu Transport Infrastructure Limited's (SEHK:1052) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess 1052's recent performance announced on 31 December 2019 and compare these figures to its long-term trend and industry movements.
Check out our latest analysis for Yuexiu Transport Infrastructure
Were 1052's earnings stronger than its past performances and the industry?
1052's trailing twelve-month earnings (from 31 December 2019) of CN¥1.1b has increased by 7.9% 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 1052 is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s occurring with margins and if the entire industry is feeling the heat.
In terms of returns from investment, Yuexiu Transport Infrastructure has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. Furthermore, its return on assets (ROA) of 4.1% is below the HK Infrastructure industry of 5.6%, indicating Yuexiu Transport Infrastructure's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Yuexiu Transport Infrastructure’s debt level, has declined over the past 3 years from 6.9% to 5.2%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 49% to 135% over the past 5 years.
What does this mean?
Though Yuexiu Transport Infrastructure's past data is helpful, it is only one aspect of my investment thesis. While Yuexiu Transport Infrastructure has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Yuexiu Transport Infrastructure 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 1052’s future growth? Take a look at our free research report of analyst consensus for 1052’s outlook.
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Financial Health: Are 1052’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.