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When Century City International Holdings Limited (HKG:355) announced its most recent earnings (30 June 2018), 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 Century City 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 355 has performed.
Check out our latest analysis for Century City International Holdings
How Well Did 355 Perform?
355’s trailing twelve-month earnings (from 30 June 2018) of HK$337m has jumped 34% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 15%, indicating the rate at which 355 is growing has accelerated. What’s the driver of this growth? Well, let’s take a look at whether it is only because of an industry uplift, or if Century City International Holdings has seen some company-specific growth.
In terms of returns from investment, Century City International Holdings has fallen short of achieving a 20% return on equity (ROE), recording 3.8% instead. Furthermore, its return on assets (ROA) of 1.3% is below the HK Hospitality industry of 4.1%, indicating Century City International Holdings’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Century City International Holdings’s debt level, has increased over the past 3 years from 0.7% to 1.4%.
What does this mean?
Though Century City International Holdings’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn’t always indicative of a continued optimistic outlook. There could be variables that are influencing the entire industry thus the high industry growth rate over the same time period. I recommend you continue to research Century City 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 355’s future growth? Take a look at our free research report of analyst consensus for 355’s outlook.
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Financial Health: Are 355’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.