When Jiyi Household International Holdings Limited (HKG:1495) announced its most recent earnings (31 December 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Jiyi Household International Holdings has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see 1495 has performed.
How 1495 fared against its long-term earnings performance and its industry
1495’s trailing twelve-month earnings (from 31 December 2018) of CN¥12m has jumped 34% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -35%, indicating the rate at which 1495 is growing has accelerated. What’s enabled this growth? Well, let’s take a look at whether it is merely attributable to industry tailwinds, or if Jiyi Household International Holdings has seen some company-specific growth.
In terms of returns from investment, Jiyi Household International Holdings has fallen short of achieving a 20% return on equity (ROE), recording 2.5% instead. Furthermore, its return on assets (ROA) of 2.6% is below the HK Trade Distributors industry of 5.0%, indicating Jiyi Household International Holdings’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Jiyi Household International Holdings’s debt level, has declined over the past 3 years from 26% to 5.7%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. There could be variables that are influencing the entire industry hence the high industry growth rate over the same period of time. You should continue to research Jiyi Household International Holdings to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 1495’s future growth? Take a look at our free research report of analyst consensus for 1495’s outlook.
- Financial Health: Are 1495’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.
- 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.
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