Most readers would already be aware that Guangdong Huate Gas' (SHSE:688268) stock increased significantly by 13% over the past three months. Given that stock prices are usually aligned with a company's financial performance in the long-term, we decided to study its financial indicators more closely to see if they had a hand to play in the recent price move. Specifically, we decided to study Guangdong Huate Gas' ROE in this article.
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Put another way, it reveals the company's success at turning shareholder investments into profits.
See our latest analysis for Guangdong Huate Gas
How Is ROE Calculated?
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 Guangdong Huate Gas is:
9.8% = CN¥141m ÷ CN¥1.4b (Based on the trailing twelve months to March 2022).
The 'return' is the yearly profit. So, this means that for every CN¥1 of its shareholder's investments, the company generates a profit of CN¥0.10.
Why Is ROE Important For Earnings Growth?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. 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. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
A Side By Side comparison of Guangdong Huate Gas' Earnings Growth And 9.8% ROE
On the face of it, Guangdong Huate Gas' ROE is not much to talk about. Yet, a closer study shows that the company's ROE is similar to the industry average of 10%. Particularly, the exceptional 22% net income growth seen by Guangdong Huate Gas over the past five years is pretty remarkable. Given the slightly low ROE, it is likely that there could be some other aspects that are driving this growth. Such as - high earnings retention or an efficient management in place.
We then performed a comparison between Guangdong Huate Gas' net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 19% in the same period.
SHSE:688268 Past Earnings Growth July 14th 2022
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. Is Guangdong Huate Gas fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Guangdong Huate Gas Making Efficient Use Of Its Profits?
Guangdong Huate Gas' three-year median payout ratio is a pretty moderate 32%, meaning the company retains 68% of its income. By the looks of it, the dividend is well covered and Guangdong Huate Gas is reinvesting its profits efficiently as evidenced by its exceptional growth which we discussed above.
While Guangdong Huate Gas has seen growth in its earnings, it only recently started to pay a dividend. It is most likely that the company decided to impress new and existing shareholders with a dividend. Existing analyst estimates suggest that the company's future payout ratio is expected to drop to 21% over the next three years. As a result, the expected drop in Guangdong Huate Gas' payout ratio explains the anticipated rise in the company's future ROE to 14%, over the same period.
Conclusion
In total, it does look like Guangdong Huate Gas has some positive aspects to its business. 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. That being so, the latest analyst forecasts show that the company will continue to see an expansion in its earnings. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.
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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.
大多数读者应该已经知道，广东华特燃气(上海证券交易所股票代码：688268)的股票在过去三个月里大幅增长了13%。考虑到股价通常与公司的长期财务表现保持一致，我们决定更仔细地研究公司的财务指标，看看它们是否对最近的价格走势起到了作用。具体地说，我们决定在本文中研究广东华特燃气的净资产收益率。
股本回报率(ROE)是用来评估公司管理层利用公司资本效率的关键指标。换句话说，它揭示了该公司成功地将股东投资转化为利润。
查看我们对广东华特燃气的最新分析
净资产收益率是如何计算的？
股本回报率可使用以下公式计算：
股本回报率=(持续经营的)净利润？股东权益
因此，根据上述公式，广东华特燃气的净资产收益率为：
9.8%=1.41亿元×14亿元(以截至2022年3月的12个月为基础)。
“回报”就是年度利润。因此，这意味着股东每投资1元人民币，公司就会产生0.10元的利润。
为什么净资产收益率对收益增长很重要？
到目前为止，我们已经了解到净资产收益率衡量的是一家公司创造利润的效率。根据公司将这些利润再投资或“保留”多少，以及这样做的效率如何，我们就能够评估一家公司的收益增长潜力。一般来说，在其他条件相同的情况下，股本回报率和利润留存较高的公司比不具备这些特征的公司有更高的增长率。
广东华特燃气盈利增长与9.8%净资产收益率的并列比较
从表面上看，广东华特燃气的净资产收益率(ROE)并不值得谈论。然而，一项更仔细的研究表明，该公司的净资产收益率接近10%的行业平均水平。特别值得一提的是，广东华特燃气在过去五年中实现了22%的超乎寻常的净收入增长，这是相当了不起的。鉴于净资产收益率略低，很可能还有其他一些方面在推动这一增长。例如-高收益留存或有效的管理到位。
然后，我们将广东华特燃气的净收入增长与行业进行了比较，结果显示，公司的增长与同期行业平均19%的增长相似。
上海证券交易所：过去688268的收益增长2022年7月14日
赋予一家公司价值的基础在很大程度上与其盈利增长挂钩。投资者下一步需要确定的是，预期的收益增长是否已经计入了股价。这样做将有助于他们确定该股的未来看起来是光明的还是不祥的。与其他公司相比，广东华特燃气的估值是否公平？这3个估值指标可能会帮助你做出决定。
广东华特燃气是否有效利用了利润？
广东华特燃气的三年派息率中值为32%，相当适中，这意味着该公司保留了68%的收入。从表面上看，股息得到了很好的覆盖，广东华特燃气正在有效地将其利润进行再投资，这从我们上面讨论的非凡增长中可见一斑。
尽管广东华特燃气的盈利有所增长，但它最近才开始派发股息。最有可能的是，该公司决定用股息给新股东和现有股东留下深刻印象。分析师现有的预估显示，该公司未来三年的派息率预计将降至21%。因此，广东华特燃气派息率的预期下降解释了该公司未来同期净资产收益率预期上升至14%的原因。
结论
总体而言，广东华特燃气的业务确实有一些积极的方面。尽管回报率很低，但该公司将很高比例的利润再投资于业务，无疑是其高收益增长的原因。既然如此，最新的分析师预测显示，该公司的收益将继续增长。要了解更多有关该公司未来收益增长预测的信息，请查看以下内容免费报告分析师对该公司的预测，以了解更多信息。
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本文由Simply Wall St.撰写，具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论，我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议，也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意，我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。
