Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Bestway Global Holding Inc’s (HKG:3358) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Check out our latest analysis for Bestway Global Holding
Did 3358 perform better than its track record and industry?
3358’s trailing twelve-month earnings (from 30 June 2018) of US$48.2m has increased by 0.7% compared to the previous year. However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 32.7%, indicating the rate at which 3358 is growing has slowed down. What could be happening here? Well, let’s look at what’s transpiring with margins and if the entire industry is facing the same headwind.
In the past few years, revenue growth has been lagging behind which implies that Bestway Global Holding’s bottom line has been propelled by unmaintainable cost-reductions. Scanning growth from a sector-level, the HK leisure industry has been relatively flat in terms of earnings growth in the past year, evening out from a notable 17.2% over the last five years. This growth is a median of profitable companies of 10 Leisure companies in HK including Alpha Era International Holdings, Honma Golf and Goodbaby International Holdings.
In terms of returns from investment, Bestway Global Holding has fallen short of achieving a 20% return on equity (ROE), recording 11.9% instead. Furthermore, its return on assets (ROA) of 6.5% is below the HK Leisure industry of 8.3%, indicating Bestway Global Holding’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Bestway Global Holding’s debt level, has increased over the past 3 years from 9.8% to 14.6%.
What does this mean?
Bestway Global Holding’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Bestway Global Holding gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Bestway Global Holding to get a better picture of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for 3358’s future growth? Take a look at our free research report of analyst consensus for 3358’s outlook.
-
Financial Health: Are 3358’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.