In This Article:
Assessing Man Wah Holdings Limited’s (HKG:1999) 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 Man Wah Holdings is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its consumer durables industry peers.
View our latest analysis for Man Wah Holdings
Despite a decline, did 1999 underperform the long-term trend and the industry?
1999’s trailing twelve-month earnings (from 31 March 2018) of HK$1.5b has declined by -12% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 18%, indicating the rate at which 1999 is growing has slowed down. What could be happening here? Well, let’s look at what’s transpiring with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Man Wah Holdings has invested its equity funds well leading to a 24% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 16% exceeds the HK Consumer Durables industry of 5.9%, indicating Man Wah Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Man Wah Holdings’s debt level, has increased over the past 3 years from 28% to 30%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 22% to 21% over the past 5 years.
What does this mean?
Man Wah Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I recommend you continue to research Man Wah Holdings 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 1999’s future growth? Take a look at our free research report of analyst consensus for 1999’s outlook.
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Financial Health: Are 1999’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 March 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.