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Measuring Raymond Industrial Limited's (HKG:229) 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 229's recent performance announced on 31 March 2019 and compare these figures to its historical trend and industry movements.
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Could 229 beat the long-term trend and outperform its industry?
229's trailing twelve-month earnings (from 31 March 2019) of HK$52m has jumped 46% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 12%, indicating the rate at which 229 is growing has accelerated. What's the driver of this growth? Let's see if it is merely attributable to an industry uplift, or if Raymond Industrial has seen some company-specific growth.
In terms of returns from investment, Raymond Industrial has fallen short of achieving a 20% return on equity (ROE), recording 8.3% instead. However, its return on assets (ROA) of 6.1% exceeds the HK Consumer Durables industry of 4.4%, indicating Raymond Industrial has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Raymond Industrial’s debt level, has increased over the past 3 years from 6.1% to 8.6%.
What does this mean?
Raymond Industrial's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Raymond Industrial has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Raymond Industrial to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for 229’s future growth? Take a look at our free research report of analyst consensus for 229’s outlook.
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Financial Health: Are 229’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 31 March 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. Thank you for reading.