Assessing Canvest Environmental Protection Group Company Limited’s (HKG:1381) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess 1381’s latest performance announced on 31 December 2018 and evaluate these figures to its historical trend and industry movements.
How 1381 fared against its long-term earnings performance and its industry
1381’s trailing twelve-month earnings (from 31 December 2018) of HK$754m has jumped 34% 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 34%, indicating the rate at which 1381 is growing has slowed down. To understand what’s happening, let’s take a look at what’s going on with margins and if the entire industry is experiencing the hit as well.
In terms of returns from investment, Canvest Environmental Protection Group has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 8.5% exceeds the HK Renewable Energy industry of 4.3%, indicating Canvest Environmental Protection Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Canvest Environmental Protection Group’s debt level, has increased over the past 3 years from 10% to 10%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Canvest Environmental Protection Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Canvest Environmental Protection Group to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 1381’s future growth? Take a look at our free research report of analyst consensus for 1381’s outlook.
- Financial Health: Are 1381’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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