The recent earnings posted by Zhejiang XCC Group Co.,Ltd (SHSE:603667) were solid, but the stock didn't move as much as we expected. We believe that shareholders have noticed some concerning factors beyond the statutory profit numbers.
View our latest analysis for Zhejiang XCC GroupLtd
SHSE:603667 Earnings and Revenue History August 29th 2022
To understand the value of a company's earnings growth, it is imperative to consider any dilution of shareholders' interests. Zhejiang XCC GroupLtd expanded the number of shares on issue by 16% over the last year. Therefore, each share now receives a smaller portion of profit. To celebrate net income while ignoring dilution is like rejoicing because you have a single slice of a larger pizza, but ignoring the fact that the pizza is now cut into many more slices. Check out Zhejiang XCC GroupLtd's historical EPS growth by clicking on this link.
How Is Dilution Impacting Zhejiang XCC GroupLtd's Earnings Per Share (EPS)?
As you can see above, Zhejiang XCC GroupLtd has been growing its net income over the last few years, with an annualized gain of 25% over three years. And in the last year the company managed to bump profit up by 14%. But in comparison, EPS only increased by 14% over the same period. Therefore, the dilution is having a noteworthy influence on shareholder returns.
In the long term, earnings per share growth should beget share price growth. So Zhejiang XCC GroupLtd shareholders will want to see that EPS figure continue to increase. However, if its profit increases while its earnings per share stay flat (or even fall) then shareholders might not see much benefit. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
How Do Unusual Items Influence Profit?
Finally, we should also consider the fact that unusual items boosted Zhejiang XCC GroupLtd's net profit by CN¥31m over the last year. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. Which is hardly surprising, given the name. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).
Our Take On Zhejiang XCC GroupLtd's Profit Performance
In its last report Zhejiang XCC GroupLtd benefitted from unusual items which boosted its profit, which could make the profit seem better than it really is on a sustainable basis. And furthermore, it went and issued plenty of new shares, ensuring that each shareholder (who did not tip more money in) now owns a smaller proportion of the company. For the reasons mentioned above, we think that a perfunctory glance at Zhejiang XCC GroupLtd's statutory profits might make it look better than it really is on an underlying level. If you want to do dive deeper into Zhejiang XCC GroupLtd, you'd also look into what risks it is currently facing. Case in point: We've spotted 4 warning signs for Zhejiang XCC GroupLtd you should be aware of.
In this article we've looked at a number of factors that can impair the utility of profit numbers, and we've come away cautious. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.
Have 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.
最近发布的收益为浙江XCC集团有限公司(上海证券交易所股票代码:603667)表现稳健,但股价走势没有我们预期的那么大。我们相信,股东已经注意到了法定利润数字以外的一些令人担忧的因素。
查看我们对浙江XCC集团有限公司的最新分析
上海证券交易所:603667收益和收入历史2022年8月29日
要了解一家公司盈利增长的价值,必须考虑对股东利益的任何稀释。浙江徐工集团股份有限公司发行的股票数量比去年增加了16%。因此,每股现在获得的利润份额较小。在庆祝净利润的同时忽视稀释,就像是因为你只有一片更大的披萨而感到高兴,但忽略了披萨现在被切成更多片的事实。点击此链接,查看浙江XCC集团有限公司每股收益的历史增长情况。
稀释对浙江XCC集团有限公司每股收益(EPS)有何影响?
正如你在上面看到的,浙江XCC集团有限公司在过去的几年里一直在增长其净收入,三年来的年化增长率为25%。去年,该公司的利润增长了14%。但相比之下,同期EPS仅增加了14%。因此,稀释对股东回报的影响是值得注意的。
从长远来看,收益每股经济增长应该会带动股价上涨。因此,浙江XCC集团有限公司的股东将希望看到每股收益继续增加。然而,如果其利润增加,而每股收益持平(甚至下降),那么股东可能看不到太多好处。出于这个原因,你可以说,从长远来看,每股收益比净利润更重要,假设目标是评估一家公司的股价是否可能增长。
这可能会让你想知道,分析师对未来盈利能力的预测是什么。幸运的是,您可以单击此处查看基于他们估计的未来盈利能力的互动图表。
不寻常的项目如何影响利润?
最后,我们还应该考虑这样一个事实,即不寻常的项目使浙江XCC集团有限公司去年的净利润增加了3100万元人民币。虽然我们喜欢看到利润增加,但当不寻常的项目做出了很大贡献时,我们往往会更加谨慎。我们对全球大多数上市公司进行了统计,不寻常的项目在性质上是一次性的,这是非常常见的。考虑到这个名字,这并不令人惊讶。假设这些不同寻常的项目在本年度不会再次出现,我们因此预计明年的利润会更弱(也就是说,在没有业务增长的情况下)。
我们对浙江XCC集团有限公司利润表现的看法
在其上一份报告中,浙江XCC集团有限公司受益于不寻常的项目,这些项目提高了其利润,这可能会使利润看起来比可持续基础上的实际情况更好。此外,它还发行了大量新股,确保每个股东(没有投入更多资金)现在拥有的公司股份比例更小。基于上述原因,我们认为,敷衍地看一眼浙江XCC集团有限公司的法定利润,可能会让它看起来比实际情况更好。如果你想更深入地研究浙江XCC集团有限公司,你还应该调查它目前面临的风险。一个恰当的例子:我们发现了浙江XCC集团有限公司的4个警示标志你应该意识到。
在这篇文章中,我们研究了一些可能削弱利润数字效用的因素,我们对此持谨慎态度。但还有很多其他方式可以让你了解一家公司的看法。例如,许多人认为高股本回报率是有利的商业经济指标,而另一些人则喜欢“跟着钱走”,寻找内部人士正在买入的股票。虽然这可能需要为您做一些研究,但您可能会发现免费拥有高股本回报率的公司的集合,或者是内部人士购买的有用的股票清单。
对这篇文章有什么反馈吗?担心内容吗? 保持联系直接与我们联系。或者,也可以给编辑组发电子邮件,地址是implywallst.com。
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。