For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Victory City International Holdings Limited (SEHK:539) useful as an attempt to give more color around how Victory City International Holdings is currently performing.
Check out our latest analysis for Victory City International Holdings
How Well Did 539 Perform?
539's trailing twelve-month earnings (from 30 September 2019) of HK$352m has jumped 28% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.3%, indicating the rate at which 539 is growing has accelerated. What's enabled this growth? Let's see if it is solely due to industry tailwinds, or if Victory City International Holdings has seen some company-specific growth.
In terms of returns from investment, Victory City International Holdings has fallen short of achieving a 20% return on equity (ROE), recording 5.1% instead. Furthermore, its return on assets (ROA) of 4.4% is below the HK Luxury industry of 5.1%, indicating Victory City International Holdings's are utilized less efficiently. However, its return on capital (ROC), which also accounts for Victory City International Holdings’s debt level, has increased over the past 3 years from 3.3% to 5.0%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Victory City International Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Victory City International Holdings to get a more holistic view of the stock by looking at:
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Financial Health: Are 539’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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Valuation: What is 539 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 539 is currently mispriced by the market.
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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 30 September 2019. This may not be consistent with full year annual report figures.
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.
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. Thank you for reading.