When IGG Inc (HKG:799) announced its most recent earnings (30 June 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well IGG has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see 799 has performed.

View our latest analysis for IGG

How 799 fared against its long-term earnings performance and its industry

799’s trailing twelve-month earnings (from 30 June 2018) of US$178m has jumped 44% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 42%, indicating the rate at which 799 is growing has accelerated. What’s the driver of this growth? Let’s take a look at if it is solely because of an industry uplift, or if IGG has experienced some company-specific growth.

In terms of returns from investment, IGG has invested its equity funds well leading to a 68% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 48% exceeds the HK Entertainment industry of 5.9%, indicating IGG has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for IGG’s debt level, has increased over the past 3 years from 33% to 81%.

What does this mean?

Though IGG’s past data is helpful, it is only one aspect of my investment thesis. While IGG has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research IGG to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 799’s future growth? Take a look at our free research report of analyst consensus for 799’s outlook.

2. Financial Health: Are 799’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.

3. 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 June 2018. This may not be consistent with full year annual report figures.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.