When Transport International Holdings Limited (HKG:62) 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 Transport 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 62 has performed.
View our latest analysis for Transport International Holdings
How Well Did 62 Perform?
62's trailing twelve-month earnings (from 30 June 2019) of HK$714m has declined by -8.9% 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 12%, indicating the rate at which 62 is growing has slowed down. Why is this? Let's examine what's going on with margins and if the entire industry is feeling the heat.
In terms of returns from investment, Transport International Holdings has fallen short of achieving a 20% return on equity (ROE), recording 6.9% instead. Furthermore, its return on assets (ROA) of 4.0% is below the HK Transportation industry of 5.4%, indicating Transport International Holdings's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Transport International Holdings’s debt level, has declined over the past 3 years from 8.2% to 4.2%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 6.5% to 26% over the past 5 years.
What does this mean?
Transport International Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. You should continue to research Transport International Holdings to get a better picture of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for 62’s future growth? Take a look at our free research report of analyst consensus for 62’s outlook.
-
Financial Health: Are 62’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.