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After looking at COSCO SHIPPING Ports Limited's (SEHK:1199) latest earnings announcement (30 June 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
Check out our latest analysis for COSCO SHIPPING Ports
Commentary On 1199's Past Performance
1199's trailing twelve-month earnings (from 30 June 2019) of US$303m has increased by 2.2% 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 6.1%, indicating the rate at which 1199 is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and if the entire industry is feeling the heat.
In terms of returns from investment, COSCO SHIPPING Ports has fallen short of achieving a 20% return on equity (ROE), recording 6.1% instead. Furthermore, its return on assets (ROA) of 3.7% is below the HK Infrastructure industry of 6.0%, indicating COSCO SHIPPING Ports's are utilized less efficiently. However, its return on capital (ROC), which also accounts for COSCO SHIPPING Ports’s debt level, has increased over the past 3 years from 2.1% to 2.2%.
What does this mean?
COSCO SHIPPING Ports's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. I suggest you continue to research COSCO SHIPPING Ports to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for 1199’s future growth? Take a look at our free research report of analyst consensus for 1199’s outlook.
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Financial Health: Are 1199’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.