Analyzing Man Wah Holdings Limited's (HKG:1999) 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 1999's recent performance announced on 31 March 2019 and compare these figures to its long-term trend and industry movements.

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Was 1999's weak performance lately a part of a long-term decline?

1999's trailing twelve-month earnings (from 31 March 2019) of HK$1.4b has declined by -11% 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 8.8%, indicating the rate at which 1999 is growing has slowed down. Why is this? Let's examine what's transpiring with margins and if the entire industry is experiencing the hit as well.

In terms of returns from investment, Man Wah Holdings has invested its equity funds well leading to a 21% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11% exceeds the HK Consumer Durables industry of 4.4%, indicating Man Wah Holdings has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Man Wah Holdings’s debt level, has declined over the past 3 years from 28% to 17%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 18% to 68% over the past 5 years.

What does this mean?

Man Wah Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. You should continue to research Man Wah Holdings to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 1999’s future growth? Take a look at our free research report of analyst consensus for 1999’s outlook.

2. Financial Health: Are 1999’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.