Measuring Fu Shou Yuan International Group Limited's (SEHK:1448) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess 1448's recent performance announced on 31 December 2019 and weigh these figures against its long-term trend and industry movements.
Could 1448 beat the long-term trend and outperform its industry?
1448's trailing twelve-month earnings (from 31 December 2019) of CN¥579m has jumped 18% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 18%, indicating the rate at which 1448 is growing has accelerated. How has it been able to do this? Let's see if it is merely due to an industry uplift, or if Fu Shou Yuan International Group has experienced some company-specific growth.
In terms of returns from investment, Fu Shou Yuan International Group has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 9.0% exceeds the HK Consumer Services industry of 6.9%, indicating Fu Shou Yuan International Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Fu Shou Yuan International Group’s debt level, has increased over the past 3 years from 15% to 17%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 4.3% to 1.9% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Fu Shou Yuan International Group to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 1448’s future growth? Take a look at our free research report of analyst consensus for 1448’s outlook.
- Financial Health: Are 1448’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 31 December 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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