Most readers would already know that Chengdu Leejun Industrial's (SZSE:002651) stock increased by 7.3% over the past three months. We wonder if and what role the company's financials play in that price change as a company's long-term fundamentals usually dictate market outcomes. Specifically, we decided to study Chengdu Leejun Industrial's ROE in this article.
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
View our latest analysis for Chengdu Leejun Industrial
How Is ROE Calculated?
ROE 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 Chengdu Leejun Industrial is:
7.8% = CN¥191m ÷ CN¥2.5b (Based on the trailing twelve months to March 2022).
The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every CN¥1 worth of equity, the company was able to earn CN¥0.08 in profit.
What Is The Relationship Between ROE And Earnings Growth?
So far, we've learned that ROE is a measure of a company's profitability. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.
Chengdu Leejun Industrial's Earnings Growth And 7.8% ROE
On the face of it, Chengdu Leejun Industrial's ROE is not much to talk about. However, given that the company's ROE is similar to the average industry ROE of 8.2%, we may spare it some thought. Even so, Chengdu Leejun Industrial has shown a fairly decent growth in its net income which grew at a rate of 16%. Given the slightly low ROE, it is likely that there could be some other aspects that are driving this growth. For instance, the company has a low payout ratio or is being managed efficiently.
We then performed a comparison between Chengdu Leejun Industrial's net income growth with the industry, which revealed that the company's growth is similar to the average industry growth of 14% in the same period.
SZSE:002651 Past Earnings Growth July 19th 2022
Earnings growth is an important metric to consider when valuing a stock. 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. 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 Chengdu Leejun Industrial is trading on a high P/E or a low P/E, relative to its industry.
Is Chengdu Leejun Industrial Efficiently Re-investing Its Profits?
With a three-year median payout ratio of 50% (implying that the company retains 50% of its profits), it seems that Chengdu Leejun Industrial is reinvesting efficiently in a way that it sees respectable amount growth in its earnings and pays a dividend that's well covered.
Besides, Chengdu Leejun Industrial has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders.
Conclusion
Overall, we feel that Chengdu Leejun Industrial certainly does have some positive factors to consider. 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. You can see the 1 risk we have identified for Chengdu Leejun Industrial by visiting our risks dashboard for free on our platform here.
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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,成都力骏实业(SZSE:002651)的股票在过去三个月里上涨了7.3%。我们想知道,由于一家公司的长期基本面通常决定着市场结果,该公司的财务状况是否以及在价格变化中扮演了什么角色。具体地说,我们决定在本文中研究成都乐骏实业的净资产收益率。
股本回报率(ROE)是对一家公司增值和管理投资者资金的效率的测试。简而言之,它衡量的是一家公司相对于股东权益的盈利能力。
查看我们对成都乐骏实业的最新分析
净资产收益率是如何计算的?
可使用以下公式计算净资产收益率:
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,成都乐骏实业的净资产收益率为:
7.8%=人民币1.91亿×人民币25亿元(根据截至2022年3月的12个月的往绩计算)。
“报税表”是过去12个月的税后收入。另一种说法是,公司每持有价值1元的股权,就能赚取0.08元的利润。
净资产收益率与盈利增长之间有什么关系?
到目前为止,我们了解到净资产收益率是衡量一家公司盈利能力的指标。我们现在需要评估公司将多少利润再投资或“保留”用于未来的增长,这就让我们对公司的增长潜力有了一个了解。假设其他条件不变,净资产收益率和利润保留率越高,与不一定具有这些特征的公司相比,公司的增长率就越高。
成都乐骏实业盈利增长7.8%净资产收益率
从表面上看,成都力骏实业的ROE并没有太多可谈。然而,鉴于该公司的净资产收益率(ROE)与8.2%的行业平均ROE相似,我们或许可以省去一些思考。尽管如此,成都乐骏实业的净利润增长还是相当可观的,增长率为16%。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,该公司的派息率较低或管理效率较高。
然后,我们将成都乐骏实业的净收入增长与行业进行了比较,结果显示,该公司的增长与同期14%的行业平均增长相似。
深圳证交所:过去002651的收益增长2022年7月19日
盈利增长是评估一只股票时需要考虑的一个重要指标。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。衡量预期收益增长的一个很好的指标是市盈率,它根据一只股票的盈利前景决定市场愿意为其支付的价格。因此,你可能想看看成都乐骏实业相对于其行业是高市盈率还是低市盈率。
成都乐骏实业是否有效地将利润再投资?
成都力骏实业的三年派息率中值为50%(这意味着该公司保留了50%的利润),看起来它正在以一种高效的方式进行再投资,它看到了收益可观的增长,并支付了丰厚的股息。
此外,成都乐骏实业至少在十年甚至更长的时间里一直在分红。这表明该公司致力于与股东分享利润。
结论
总体而言,我们觉得成都乐骏实业确实有一些积极的因素需要考虑。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。虽然我们不会完全解雇这家公司,但我们要做的是努力确定这项业务在公司周围做出更明智的决定的风险有多大。您可以访问我们为成都乐骏实业确定的1个风险网站风险控制面板在我们的平台上是免费的。
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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。