Want To Invest In China Resources Land Limited (HKG:1109)? Here’s How It Performed Lately

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After looking at China Resources Land Limited’s (HKG:1109) latest earnings announcement (31 December 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.

See our latest analysis for China Resources Land

Were 1109’s earnings stronger than its past performances and the industry?

1109’s trailing twelve-month earnings (from 31 December 2018) of CN¥24b has jumped 23% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 15%, indicating the rate at which 1109 is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is solely owing to industry tailwinds, or if China Resources Land has seen some company-specific growth.

SEHK:1109 Income Statement, June 5th 2019
SEHK:1109 Income Statement, June 5th 2019

In terms of returns from investment, China Resources Land has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 3.6% exceeds the HK Real Estate industry of 3.2%, indicating China Resources Land has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for China Resources Land’s debt level, has increased over the past 3 years from 12% to 14%.

What does this mean?

Though China Resources Land’s past data is helpful, it is only one aspect of my investment thesis. While China Resources Land has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research China Resources Land to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 1109’s future growth? Take a look at our free research report of analyst consensus for 1109’s outlook.
  2. Financial Health: Are 1109’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.
  3. 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.

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.