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Assessing China Everbright Water Limited’s (SGX:U9E) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how China Everbright Water is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its water utilities industry peers.
See our latest analysis for China Everbright Water
Did U9E’s recent earnings growth beat the long-term trend and the industry?
U9E’s trailing twelve-month earnings (from 31 December 2018) of HK$676m has jumped 32% 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 U9E is growing has accelerated. What’s the driver of this growth? Let’s take a look at if it is only owing to industry tailwinds, or if China Everbright Water has seen some company-specific growth.
In terms of returns from investment, China Everbright Water has fallen short of achieving a 20% return on equity (ROE), recording 8.5% instead. However, its return on assets (ROA) of 4.9% exceeds the SG Water Utilities industry of 4.7%, indicating China Everbright Water has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for China Everbright Water’s debt level, has increased over the past 3 years from 6.5% to 7.6%.
What does this mean?
Though China Everbright Water’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as China Everbright Water gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research China Everbright Water 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 U9E’s future growth? Take a look at our free research report of analyst consensus for U9E’s outlook.
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Financial Health: Are U9E’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 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.