In This Article:
Measuring China Everbright Water Limited's (SGX:U9E) 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 U9E's recent performance announced on 30 September 2019 and compare these figures to its historical trend and industry movements.
Check out our latest analysis for China Everbright Water
Were U9E's earnings stronger than its past performances and the industry?
U9E's trailing twelve-month earnings (from 30 September 2019) of HK$765m has jumped 18% 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 20%, indicating the rate at which U9E is growing has slowed down. What could be happening here? Well, let’s take a look at what’s occurring with margins and whether the entire industry is feeling the heat.
In terms of returns from investment, China Everbright Water has fallen short of achieving a 20% return on equity (ROE), recording 8.9% instead. However, its return on assets (ROA) of 5.2% exceeds the SG Water Utilities industry of 4.6%, 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 6.7% to 7.9%.
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 China Everbright Water to get a more holistic view 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 30 September 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 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.
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