Should Weakness in GC Construction Holdings Limited's (HKG:1489) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?

Simply Wall St.10-09

GC Construction Holdings (HKG:1489) has had a rough month with its share price down 15%. But if you pay close attention, you might find that its key financial indicators look quite decent, which ...

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But if you pay close attention, you might find that its key financial indicators look quite decent, which ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/consumer-durables/hkg-1489/gc-construction-holdings-shares/news/should-weakness-in-gc-construction-holdings-limiteds-hkg1489\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Should Weakness in GC Construction Holdings Limited's (HKG:1489) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nShould Weakness in GC Construction Holdings Limited's (HKG:1489) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-09 07:43 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/consumer-durables/hkg-1489/gc-construction-holdings-shares/news/should-weakness-in-gc-construction-holdings-limiteds-hkg1489><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>GC Construction Holdings (HKG:1489) has had a rough month with its share price down 15%.   But if you pay close attention, you might find that its key financial indicators look quite decent, which ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/consumer-durables/hkg-1489/gc-construction-holdings-shares/news/should-weakness-in-gc-construction-holdings-limiteds-hkg1489\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"01489","symbol_name":"GC CONSTRUCTION","start_time":0,"source_url":"https://simplywall.st/stocks/hk/consumer-durables/hkg-1489/gc-construction-holdings-shares/news/should-weakness-in-gc-construction-holdings-limiteds-hkg1489","article_id":"2474239860","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/4113000-choice2-main-header/1585186663126"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2474239860","pubTimestamp":1728431021,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"GC Construction Holdings (HKG:1489) has had a rough month with its share price down 15%. But if you pay close...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"01489":"GC CONSTRUCTION","BK1107":"住宅建筑"},"translate_title":"GC Construction Holdings Limited（HKG：1489）股票的疲软是否应被视为市场将在良好的财务状况下调整股价的迹象？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"01489":1},"content_text":"GC Construction Holdings (HKG:1489) has had a rough month with its share price down 15%.   But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals.     In this article, we decided to focus on GC Construction Holdings'  ROE.    ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders.  In short, ROE shows the profit each dollar generates with respect to its shareholder investments.  View our latest analysis for GC Construction Holdings  How To Calculate Return On Equity?  Return on equity can be calculated by using the formula:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for GC Construction Holdings is:5.9% = HK$19m ÷ HK$326m (Based on the trailing twelve months to March 2024). The 'return' is the income the business earned over the last year.  So, this means that for every HK$1 of its shareholder's investments, the company generates a profit of HK$0.06.   What Has ROE Got To Do With Earnings Growth?  So far, we've learned that ROE is a measure of a company's profitability.  Depending on how much of these profits the company reinvests or \"retains\", and how effectively it does so, we are then able to assess a company’s earnings growth potential.  Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.  GC Construction Holdings' Earnings Growth And 5.9% ROE   On the face of it, GC Construction Holdings' ROE is not much to talk about.   Next, when compared to the average industry ROE of 11%, the company's ROE leaves us feeling even less enthusiastic.   GC Construction Holdings was still able to see a decent net income growth of 5.1% over the past five years.  So, the growth in the company's earnings could probably have been caused by other variables.  For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.     As a next step, we compared GC Construction Holdings' net income growth with the industry and found that the company has a similar growth figure when compared with the industry average growth rate of 5.1% in the same period.   SEHK:1489 Past Earnings Growth October 8th 2024 The basis for attaching value to a company is, to a great extent, tied to its earnings growth.  It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline).  Doing so will help them establish if the stock's future looks promising or ominous.    One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if GC Construction Holdings is trading on a high P/E or a low P/E, relative to its industry.    Is GC Construction Holdings Making Efficient Use Of Its Profits?    GC Construction Holdings doesn't pay any regular dividends currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the decent earnings growth number that we discussed above.     Summary    On the whole, we do feel that GC Construction Holdings has some positive attributes.      Despite its low rate of return, the fact that the company reinvests a very high portion of its profits into its business, no doubt contributed to its high earnings growth.       While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company.   To know the 2 risks we have identified for GC Construction Holdings visit our risks dashboard for free. New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2474239860"}