Red Star Macalline Group Corporation Ltd.’s (HKG:1528) Earnings Grew 9.8%, Did It Beat Long-Term Trend?

Assessing Red Star Macalline Group Corporation Ltd.’s (HKG:1528) 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 Red Star Macalline Group is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its real estate industry peers.

Check out our latest analysis for Red Star Macalline Group

Commentary On 1528’s Past Performance

1528’s trailing twelve-month earnings (from 31 December 2018) of CN¥4.5b has increased by 9.8% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.3%, indicating the rate at which 1528 is growing has accelerated. What’s the driver of this growth? Well, let’s take a look at whether it is solely due to an industry uplift, or if Red Star Macalline Group has seen some company-specific growth.

SEHK:1528 Income Statement, April 2nd 2019
SEHK:1528 Income Statement, April 2nd 2019

In terms of returns from investment, Red Star Macalline Group has fallen short of achieving a 20% return on equity (ROE), recording 10% instead. However, its return on assets (ROA) of 5.1% exceeds the HK Real Estate industry of 3.4%, indicating Red Star Macalline Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Red Star Macalline Group’s debt level, has increased over the past 3 years from 6.3% to 6.6%.

What does this mean?

Red Star Macalline Group’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Red Star Macalline Group has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Red Star Macalline Group to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for 1528’s future growth? Take a look at our free research report of analyst consensus for 1528’s outlook.
  2. Financial Health: Are 1528’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.