In This Article:
Assessing Texhong Textile Group Limited's (SEHK:2678) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess 2678's latest performance announced on 30 June 2019 and evaluate these figures to its historical trend and industry movements.
See our latest analysis for Texhong Textile Group
Did 2678 perform worse than its track record and industry?
2678's trailing twelve-month earnings (from 30 June 2019) of CN¥1.0b has declined by -7.0% 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 18%, indicating the rate at which 2678 is growing has slowed down. What could be happening here? Well, let's look at what's transpiring with margins and whether the entire industry is facing the same headwind.
In terms of returns from investment, Texhong Textile Group has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 6.7% exceeds the HK Luxury industry of 5.6%, indicating Texhong Textile Group has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Texhong Textile Group’s debt level, has declined over the past 3 years from 18% to 12%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 94% to 102% over the past 5 years.
What does this mean?
Though Texhong Textile Group's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors affecting its business. I suggest you continue to research Texhong Textile Group to get a better picture of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for 2678’s future growth? Take a look at our free research report of analyst consensus for 2678’s outlook.
-
Financial Health: Are 2678’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.
-
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.