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Measuring Oriental University City Holdings (HK) Limited’s (HKG:8067) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 8067’s recent performance announced on 30 June 2018 and compare these figures to its historical trend and industry movements.
See our latest analysis for Oriental University City Holdings (H.K.)
Commentary On 8067’s Past Performance
8067’s trailing twelve-month earnings (from 30 June 2018) of CN¥163.2m has more than doubled from CN¥42.2m in the prior year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 9.1%, indicating the rate at which 8067 is growing has accelerated. What’s enabled this growth? Well, let’s take a look at if it is solely a result of an industry uplift, or if Oriental University City Holdings (H.K.) has experienced some company-specific growth.
Over the last couple of years, Oriental University City Holdings (H.K.) increased its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time.
Inspecting growth from a sector-level, the HK real estate industry has been growing its average earnings by double-digit 48.1% over the past twelve months, and a more subdued 7.6% over the last five years. This growth is a median of profitable companies of 25 Real Estate companies in HK including Sino Harbour Holdings Group, Tian An China Investments and Chuang’s China Investments. This means that whatever tailwind the industry is enjoying, Oriental University City Holdings (H.K.) is capable of leveraging this to its advantage.
In terms of returns from investment, Oriental University City Holdings (H.K.) has fallen short of achieving a 20% return on equity (ROE), recording 14.3% instead. However, its return on assets (ROA) of 12.7% exceeds the HK Real Estate industry of 3.7%, indicating Oriental University City Holdings (H.K.) has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Oriental University City Holdings (H.K.)’s debt level, has increased over the past 3 years from 2.4% to 3.8%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Oriental University City Holdings (H.K.) has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Oriental University City Holdings (H.K.) to get a more holistic view of the stock by looking at: