The past record of success of Chinese property developer China Jinmao Holdings Group Limited is a useful exercise for shareholders who want to boost their portfolios.
Realtors took a look into the current results of China Jinmao Holdings Group Limited (SEHK: 817) and found the real estate holding's recent market performance to be quite impressive.
Has China Jinmao Holdings Group Limited (SEHK: 817) reversed the long-term growth pattern in profits and its industry?
For starters, SEHK: 817's trailing twelve-month profits (starting from June 30 this year) soared 18 million year-on-year. That says a lot about what SEHK: 817 stock has been up to lately.
This one-year growth rate has reached its average annual increase of 9.2 percent for five years, reflecting the pace at which 817 is increasing.
Although its 1.8 percent return on assets (ROA) fell below the 2.8 billion HK Real Estate industry standards, it does not suggest that China Jinmao Holdings Group may be performing less effectively.
It's capital return (ROC), which also accounts for the debt margin of China Jinmao Holdings Group, has declined from 6.5 percent to 5.1 percent in the last three years.
It coincides with a debt ownership rise, with the debt-to-equity ratio (DTE) increasing over the past five years from 80 percent to 113 percent.
China Jinmao took a major leap towards its July mixed-ownership restructuring, ceasing to be a state-owned Sinochem Corporation affiliate, and introducing a new strategic partner.
The company's specialized land banking network is aimed to contribute 60 percent of the newly acquired land bank over the next three years via community service ventures.
China Jinmao's lower peer-related price to earnings ratio is supported by the company's success with the mixed-ownership change, its niche land banking platform in terms of city operational ventures, solid year-to-date contract sales growth, and recurring revenue streams from commercial and hotel assets.
China's floor-to-floor property sales dropped 3.6 percent year-on-year in the first two months of 2019, official data showed, while new home prices grew at their slowest pace in February in 10 months as the economy continued to cool down.
In contrast, Country Garden Holdings Co Ltd, China's largest developer of total sales, posted a 38 percent increase in core income for 2018 to a record of strong revenue and higher margins, in line with analysts' estimates.
While past data from China Jinmao Holdings Group is beneficial, it is just one dimension of analysts' investment thesis.
China Jinmao Holdings Group Limited, a subsidiary of the state-owned Sinochem Corporation, is involved in real estate development. It is headquartered in Hong Kong, but its market is primarily in mainland China.
Although the property development firm has a good track record of positive growth and productivity, there is no guarantee that this will be extrapolated into the future.
Some real estate analysts recommend investors to continue to investigate China Jinmao Holdings Group by looking at the company's future outlook, financial health, and other high-performing stocks.
