What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. Having said that, from a first glance at Zhiyang Innovation Technology (SHSE:688191) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look.
Return On Capital Employed (ROCE): What Is It?
If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. Analysts use this formula to calculate it for Zhiyang Innovation Technology:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.085 = CN¥73m ÷ (CN¥1.2b - CN¥352m) (Based on the trailing twelve months to June 2022).
So, Zhiyang Innovation Technology has an ROCE of 8.5%. On its own, that's a low figure but it's around the 8.5% average generated by the Electrical industry.
View our latest analysis for Zhiyang Innovation Technology
SHSE:688191 Return on Capital Employed August 23rd 2022
While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you want to delve into the historical earnings, revenue and cash flow of Zhiyang Innovation Technology, check out these free graphs here.
What Does the ROCE Trend For Zhiyang Innovation Technology Tell Us?
On the surface, the trend of ROCE at Zhiyang Innovation Technology doesn't inspire confidence. Around four years ago the returns on capital were 20%, but since then they've fallen to 8.5%. Although, given both revenue and the amount of assets employed in the business have increased, it could suggest the company is investing in growth, and the extra capital has led to a short-term reduction in ROCE. If these investments prove successful, this can bode very well for long term stock performance.
The Bottom Line
In summary, despite lower returns in the short term, we're encouraged to see that Zhiyang Innovation Technology is reinvesting for growth and has higher sales as a result. However, despite the promising trends, the stock has fallen 36% over the last year, so there might be an opportunity here for astute investors. As a result, we'd recommend researching this stock further to uncover what other fundamentals of the business can show us.
If you want to continue researching Zhiyang Innovation Technology, you might be interested to know about the 3 warning signs that our analysis has discovered.
While Zhiyang Innovation Technology may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list 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.
我们应该寻找什么样的趋势,我们想要找出能够长期成倍增值的股票?首先,我们希望看到一个经过验证的退货关于已使用资本(ROCE)的增长,其次是扩张基地已动用资本的比例。这向我们表明,它是一台复合机器,能够不断地将其收益再投资于企业,并产生更高的回报。话虽如此,从第一眼看智扬创新科技(上海证券交易所:688191)我们不会因为回报率的趋势而从椅子上跳起来,但让我们更深入地看看。
资本回报率(ROCE):它是什么?
如果你以前没有使用过ROCE,它衡量的是一家公司从业务资本中获得的“回报”(税前利润)。分析师对智扬创新科技的计算公式如下:
已动用资本回报率=息税前收益(EBIT)?(总资产-流动负债)
0.085=CN元7300万?(CN元12亿-CN元3.52亿)(根据截至2022年6月的往绩12个月计算).
所以,智扬创新科技的ROCE为8.5%。就其本身而言,这是一个很低的数字,但它大约是电气行业8.5%的平均发电量。
查看我们对智扬创新科技的最新分析
上证所:2022年8月23日资本回报率688191
虽然过去并不代表未来,但了解一家公司历史上的表现是有帮助的,这就是为什么我们有上面的图表。如果你想深入研究智扬创新科技的历史收益、收入和现金流,请查看以下内容免费图表在这里。
智扬创新科技的ROCE趋势告诉我们什么?
从表面上看,智扬创新科技的ROCE趋势并没有激发信心。大约四年前,资本回报率为20%,但自那以来已降至8.5%。尽管,考虑到收入和业务中使用的资产数量都有所增加,这可能表明该公司正在投资于增长,而额外的资本导致了ROCE的短期下降。如果这些投资被证明是成功的,这可能是长期股票表现的好兆头。
底线
总而言之,尽管短期内回报较低,但我们感到鼓舞的是,智洋创新科技正在为增长进行再投资,并因此拥有更高的销售额。然而,尽管趋势看好,但该股在过去一年中下跌了36%,因此精明的投资者可能会有机会。因此,我们建议进一步研究这只股票,以揭示该业务的其他基本面可以向我们展示什么。
如果你想继续研究智扬创新科技,你可能会有兴趣了解一下3个警示标志我们的分析发现。
虽然智扬创新科技目前的回报率可能不是最高的,但我们已经编制了一份目前股本回报率超过25%的公司名单。看看这个免费在这里列出。
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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。