Yahoo Finance Does China Longyuan Power Group Corporation Limited’s (HKG:916) Past Performance Indicate A Stronger Future?
Measuring China Longyuan Power Group Corporation Limited’s (HKG:916) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 916’s recent performance announced on 31 March 2018 and compare these figures to its historical trend and industry movements. See our latest analysis for China Longyuan Power Group
How Well Did 916 Perform?
916’s trailing twelve-month earnings (from 31 March 2018) of HK$4.45b has jumped 27.60% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 7.52%, indicating the rate at which 916 is growing has accelerated. What’s the driver of this growth? Let’s take a look at whether it is merely owing to an industry uplift, or if China Longyuan Power Group has seen some company-specific growth.
In the last couple of years, China Longyuan Power Group grew its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the HK renewable energy industry has been relatively flat in terms of earnings growth over the previous twelve months, levelling off from a notable 11.91% over the past five. This means that whatever recent headwind the industry is experiencing, China Longyuan Power Group is relatively better-cushioned than its peers.
In terms of returns from investment, China Longyuan Power Group has not invested its equity funds well, leading to a 10.04% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 5.09% exceeds the HK Renewable Energy industry of 4.22%, indicating China Longyuan Power Group has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for China Longyuan Power Group’s debt level, has increased over the past 3 years from 5.82% to 6.53%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 160.93% to 146.28% over the past 5 years.
What does this mean?
Though China Longyuan Power Group’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research China Longyuan Power Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 916’s future growth? Take a look at our free research report of analyst consensus for 916’s outlook.
Financial Health: Is 916’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 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
