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Examining Shandong Weigao Group Medical Polymer Company Limited's (HKG:1066) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 1066's latest performance announced on 31 December 2018 and weigh these figures against its longer term trend and industry movements.
View our latest analysis for Shandong Weigao Group Medical Polymer
How 1066 fared against its long-term earnings performance and its industry
1066's trailing twelve-month earnings (from 31 December 2018) of CN¥1.5b has jumped 17% 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 18%, indicating the rate at which 1066 is growing has slowed down. Why could this be happening? Well, let's examine what's going on with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Shandong Weigao Group Medical Polymer has fallen short of achieving a 20% return on equity (ROE), recording 10.0% instead. However, its return on assets (ROA) of 6.5% exceeds the HK Medical Equipment industry of 5.9%, indicating Shandong Weigao Group Medical Polymer has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Shandong Weigao Group Medical Polymer’s debt level, has declined over the past 3 years from 11% to 8.8%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 4.4% to 35% over the past 5 years.
What does this mean?
Shandong Weigao Group Medical Polymer's track record can be a valuable insight into its earnings performance, but it certainly 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 Shandong Weigao Group Medical Polymer 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 1066’s future growth? Take a look at our free research report of analyst consensus for 1066’s outlook.
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Financial Health: Are 1066’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.