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Measuring Keck Seng Investments (Hong Kong) Limited's (SEHK:184) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess 184's recent performance announced on 30 June 2019 and compare these figures to its historical trend and industry movements.
View our latest analysis for Keck Seng Investments (Hong Kong)
Was 184's recent earnings decline indicative of a tough track record?
184's trailing twelve-month earnings (from 30 June 2019) of HK$179m has declined by -9.9% 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 -12%, indicating the rate at which 184 is growing has slowed down. Why could this be happening? Let's examine what's transpiring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Keck Seng Investments (Hong Kong) has fallen short of achieving a 20% return on equity (ROE), recording 6.7% instead. Furthermore, its return on assets (ROA) of 2.8% is below the HK Hospitality industry of 4.7%, indicating Keck Seng Investments (Hong Kong)'s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Keck Seng Investments (Hong Kong)’s debt level, has declined over the past 3 years from 6.4% to 4.9%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 11% to 41% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Typically companies that experience an extended period of diminishing earnings are undergoing some sort of reinvestment phase Though if the whole industry is struggling to grow over time, it may be a sign of a structural change, which makes Keck Seng Investments (Hong Kong) and its peers a higher risk investment. I recommend you continue to research Keck Seng Investments (Hong Kong) 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 184’s future growth? Take a look at our free research report of analyst consensus for 184’s outlook.
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Financial Health: Are 184’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.