In This Article:
Understanding Winox Holdings Limited's (SEHK:6838) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Winox Holdings is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.
View our latest analysis for Winox Holdings
Did 6838's recent earnings growth beat the long-term trend and the industry?
6838's trailing twelve-month earnings (from 30 June 2019) of HK$145m has increased by 3.3% 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 29%, indicating the rate at which 6838 is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s transpiring with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, Winox Holdings has invested its equity funds well leading to a 20% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 16% exceeds the HK Luxury industry of 5.3%, indicating Winox Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Winox Holdings’s debt level, has increased over the past 3 years from 13% to 22%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 26% to 5.7% over the past 5 years.
What does this mean?
Winox Holdings'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 suggest you continue to research Winox Holdings 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 6838’s future growth? Take a look at our free research report of analyst consensus for 6838’s outlook.
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Financial Health: Are 6838’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 June 2019. 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.