In This Article:
Examining Pokfulam Development Company Limited’s (HKG:225) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 225’s latest performance announced on 30 September 2018 and weigh these figures against its longer term trend and industry movements.
View our latest analysis for Pokfulam Development
Were 225’s earnings stronger than its past performances and the industry?
225’s trailing twelve-month earnings (from 30 September 2018) of HK$481m has jumped 15% 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 25%, indicating the rate at which 225 is growing has slowed down. To understand what’s happening, let’s take a look at what’s transpiring with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, Pokfulam Development has fallen short of achieving a 20% return on equity (ROE), recording 8.8% instead. However, its return on assets (ROA) of 8.2% exceeds the HK Real Estate industry of 3.8%, indicating Pokfulam Development has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Pokfulam Development’s debt level, has declined over the past 3 years from 1.3% to 1.1%.
What does this mean?
Though Pokfulam Development’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Pokfulam Development 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 225’s future growth? Take a look at our free research report of analyst consensus for 225’s outlook.
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Financial Health: Are 225’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 September 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.