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When Vinda International Holdings Limited (SEHK:3331) released its most recent earnings update (30 June 2019), 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 Vinda International Holdings 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 3331 has performed.
Check out our latest analysis for Vinda International Holdings
Despite a decline, did 3331 underperform the long-term trend and the industry?
3331's trailing twelve-month earnings (from 30 June 2019) of HK$672m has declined by -6.4% 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 6.9%, indicating the rate at which 3331 is growing has slowed down. What could be happening here? Let's examine what's going on with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, Vinda International Holdings has fallen short of achieving a 20% return on equity (ROE), recording 7.5% instead. Furthermore, its return on assets (ROA) of 4.6% is below the HK Household Products industry of 8.5%, indicating Vinda International Holdings's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Vinda International Holdings’s debt level, has declined over the past 3 years from 7.9% to 7.8%.
What does this mean?
Though Vinda International Holdings's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I recommend you continue to research Vinda International Holdings 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 3331’s future growth? Take a look at our free research report of analyst consensus for 3331’s outlook.
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Financial Health: Are 3331’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 30 June 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.