TravelSky Technology's (HKG:696) stock is up by a considerable 24% over the past three months. However, we decided to pay attention to the company's fundamentals which don't appear to give a clear sign about the company's financial health. Particularly, we will be paying attention to TravelSky Technology's ROE today.
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
Check out our latest analysis for TravelSky Technology
How To Calculate Return On Equity?
The formula for ROE is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for TravelSky Technology is:
3.2% = CN¥611m ÷ CN¥19b (Based on the trailing twelve months to December 2021).
The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every HK$1 worth of equity, the company was able to earn HK$0.03 in profit.
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. 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.
TravelSky Technology's Earnings Growth And 3.2% ROE
It is quite clear that TravelSky Technology's ROE is rather low. Even when compared to the industry average of 9.3%, the ROE figure is pretty disappointing. Given the circumstances, the significant decline in net income by 24% seen by TravelSky Technology over the last five years is not surprising. We reckon that there could also be other factors at play here. Such as - low earnings retention or poor allocation of capital.
That being said, we compared TravelSky Technology's performance with the industry and were concerned when we found that while the company has shrunk its earnings, the industry has grown its earnings at a rate of 6.0% in the same period.
SEHK:696 Past Earnings Growth August 8th 2022
Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. Is TravelSky Technology fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is TravelSky Technology Making Efficient Use Of Its Profits?
In spite of a normal three-year median payout ratio of 33% (that is, a retention ratio of 67%), the fact that TravelSky Technology's earnings have shrunk is quite puzzling. So there might be other factors at play here which could potentially be hampering growth. For example, the business has faced some headwinds.
Additionally, TravelSky Technology has paid dividends over a period of at least ten years, which means that the company's management is determined to pay dividends even if it means little to no earnings growth. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 33%. However, TravelSky Technology's ROE is predicted to rise to 10% despite there being no anticipated change in its payout ratio.
Summary
On the whole, we feel that the performance shown by TravelSky Technology can be open to many interpretations. While the company does have a high rate of profit retention, its low rate of return is probably hampering its earnings growth. Having said that, looking at current analyst estimates, we found that the company's earnings growth rate is expected to see a huge improvement. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company.
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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.
TravelSky Technology(HKG:696)的股票在过去三个月中大幅上涨了24%。然而,我们决定关注该公司的基本面,这些基本面似乎并未给出该公司财务健康状况的明确迹象。特别是,今天我们将关注TravelSky Technology的ROE。
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,净资产收益率显示了每一美元相对于其股东投资产生的利润。
查看我们对TravelSky Technology的最新分析
如何计算股本回报率?
这个净资产收益率公式是:
股本回报率=(持续经营的)净利润?股东权益
因此,根据上面的公式,TravelSky科技的ROE为:
3.2%=CN元6.11亿×CN元19B(以截至2021年12月的12个月为基础)。
“报税表”是过去12个月的税后收入。另一种说法是,该公司每持有价值1港元的股票,就能赚取0.03港元的利润。
净资产收益率与盈利增长有什么关系?
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。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。
TravelSky Technology的收益增长和3.2%的净资产收益率
很明显,TravelSky Technology的净资产收益率(ROE)相当低。即使与9.3%的行业平均水平相比,净资产收益率数字也相当令人失望。在这种情况下,TravelSky Technology在过去五年中净收入大幅下降24%并不令人意外。我们认为,可能还有其他因素在起作用。例如-低收益留存或资本分配不佳。
话虽如此,我们将TravelSky Technology的表现与行业进行了比较,当我们发现尽管该公司的收益有所缩水,但该行业同期的收益以6.0%的速度增长时,我们感到担忧。
联交所:696过去盈利增长2022年8月8日
盈利增长是股票估值的一个重要因素。投资者应该尝试确定预期的收益增长或下降是否已计入价格,无论是哪种情况。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,TravelSky科技的估值是否公平?这3个估值指标可能会帮助你做出决定。
TravelSky科技公司是否有效地利用了其利润?
尽管正常的三年中值派息率为33%(即留存率为67%),但TravelSky Technology的收益缩水的事实相当令人费解。因此,可能还有其他因素在起作用,可能会阻碍经济增长。例如,该业务一直面临一些不利因素。
此外,TravelSky Technology在至少十年的时间里支付了股息,这意味着公司管理层决心支付股息,即使这意味着收益几乎没有增长。根据最新的分析师预估,我们发现该公司未来三年的派息比率预计将稳定在33%。然而,TravelSky Technology的净资产收益率预计将上升至10%,尽管其派息率没有预期的变化。
摘要
总体来说,我们觉得TravelSky科技展示的表现可以有多种解读。虽然该公司的利润留存率确实很高,但其低回报率可能正在阻碍其收益增长。话虽如此,看看目前分析师的预估,我们发现该公司的盈利增长率预计将出现巨大改善。这些分析师的预期是基于对该行业的广泛预期,还是基于该公司的基本面?点击此处进入我们分析师对该公司的预测页面。
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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。