Examining CapitaLand Limited’s (SGX:C31) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess C31’s latest performance announced on 31 March 2018 and compare these figures to its longer term trend and industry movements. Check out our latest analysis for CapitaLand
How Well Did C31 Perform?
C31’s trailing twelve-month earnings (from 31 March 2018) of S$1.48b has increased by 8.22% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 6.96%, indicating the rate at which C31 is growing has accelerated. What’s the driver of this growth? Let’s see whether it is merely a result of an industry uplift, or if CapitaLand has experienced some company-specific growth. The hike in earnings seems to be bolstered by a strong top-line increase beating its growth rate of expenses. Though this has caused a margin contraction, it has made CapitaLand more profitable. Eyeballing growth from a sector-level, the SG real estate industry has been growing its average earnings by double-digit 22.05% over the previous twelve months, . This is a turnaround from a volatile drop of -3.21% in the last few years. This growth is a median of profitable companies of 24 Real Estate companies in SG including Hong Lai Huat Group, Yoma Strategic Holdings and SingHaiyi Group. This suggests that, in the recent industry expansion, CapitaLand has not been able to leverage it as much as its industry peers.
SGX:C31 Income Statement Export August 8th 18 In terms of returns from investment, CapitaLand may not have invested its equity funds well, leading to a 7.19% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 3.03% is below the SG Real Estate industry of 3.50%, indicating CapitaLand’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for CapitaLand’s debt level, has declined over the past 3 years from 4.87% to 3.92%.
What does this mean?
CapitaLand’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as CapitaLand gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research CapitaLand to get a better picture of the stock by looking at: