What are the early trends we should look for to identify a stock that could multiply in value over the long term? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. That's why when we briefly looked at Xingfa Aluminium Holdings' (HKG:98) ROCE trend, we were pretty happy with what we saw.
Understanding Return On Capital Employed (ROCE)
For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Xingfa Aluminium Holdings, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.18 = CN¥1.0b ÷ (CN¥12b - CN¥6.9b) (Based on the trailing twelve months to June 2022).
So, Xingfa Aluminium Holdings has an ROCE of 18%. In absolute terms, that's a satisfactory return, but compared to the Metals and Mining industry average of 13% it's much better.
View our latest analysis for Xingfa Aluminium Holdings
SEHK:98 Return on Capital Employed September 2nd 2022
Historical performance is a great place to start when researching a stock so above you can see the gauge for Xingfa Aluminium Holdings' ROCE against it's prior returns. If you'd like to look at how Xingfa Aluminium Holdings has performed in the past in other metrics, you can view this free graph of past earnings, revenue and cash flow.
What Does the ROCE Trend For Xingfa Aluminium Holdings Tell Us?
While the returns on capital are good, they haven't moved much. The company has consistently earned 18% for the last five years, and the capital employed within the business has risen 139% in that time. 18% is a pretty standard return, and it provides some comfort knowing that Xingfa Aluminium Holdings has consistently earned this amount. Stable returns in this ballpark can be unexciting, but if they can be maintained over the long run, they often provide nice rewards to shareholders.
On a separate but related note, it's important to know that Xingfa Aluminium Holdings has a current liabilities to total assets ratio of 55%, which we'd consider pretty high. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.
In Conclusion...
The main thing to remember is that Xingfa Aluminium Holdings has proven its ability to continually reinvest at respectable rates of return. On top of that, the stock has rewarded shareholders with a remarkable 119% return to those who've held over the last five years. So even though the stock might be more "expensive" than it was before, we think the strong fundamentals warrant this stock for further research.
On a final note, we've found 1 warning sign for Xingfa Aluminium Holdings that we think you should be aware of.
While Xingfa Aluminium Holdings 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.
我们应该寻找哪些早期趋势来识别一只可能在长期内成倍增值的股票?一种常见的方法是尝试找到一家拥有退货已使用资本(ROCE)正在增加,同时也在增长金额已动用资本的比例。简而言之,这些类型的企业是复利机器,这意味着它们不断地以越来越高的回报率对收益进行再投资。这就是为什么当我们短暂地查看兴发铝业控股有限公司(HKG:98)ROCE趋势,我们对所看到的相当满意。
了解资本回报率(ROCE)
对于那些不确定ROCE是什么的人,它衡量的是一家公司可以从其业务中使用的资本产生的税前利润。要计算兴发铝业控股的这一指标,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)
0.18=CN元10亿?(CN元120亿-CN元69亿)(根据截至2022年6月的往绩12个月计算).
所以,兴发铝业控股的净资产收益率为18%。就绝对值而言,这是一个令人满意的回报率,但与金属和矿业13%的平均回报率相比,这要好得多。
查看我们对兴发铝业控股的最新分析
联交所:98已动用资本回报率2022年9月2日
在研究一只股票时,历史表现是一个很好的起点,因为在历史表现上方,你可以看到兴发铝业控股公司的ROCE相对于它之前的回报的衡量标准。如果你想看看兴发铝业控股过去在其他指标上的表现,你可以查看以下内容免费过去收益、收入和现金流的图表。
兴发铝业的ROCE走势告诉了我们什么?
虽然资本回报率不错,但它们并没有太大变动。该公司在过去五年中持续盈利18%,同期公司内部资本增长了139%。18%是一个相当标准的回报率,知道兴发铝业控股公司一直都能赚到这个数字,这让人感到些许安慰。这样的稳定回报可能并不令人兴奋,但如果它们能够长期保持下去,它们往往会为股东提供丰厚的回报。
在另外一个相关的问题上,重要的是要知道,兴发铝业控股公司的流动负债与总资产的比率为55%,我们认为这个比率相当高。这实际上意味着供应商(或短期债权人)正在为很大一部分业务提供资金,因此只需意识到这可能会带来一些风险因素。虽然这不一定是一件坏事,但如果这一比例较低,它可能是有益的。
总之..。
要记住的主要一点是,兴发铝业控股公司已经证明了它有能力继续以可观的回报率进行再投资。最重要的是,与过去五年持有的股票相比,该股为股东带来了高达119%的回报。因此,尽管这只股票可能比以前更“昂贵”,但我们认为强劲的基本面为这只股票提供了进一步研究的理由。
最后一点,我们发现兴发铝业控股公司的1个警告标志我们认为你应该意识到。
虽然兴发铝业控股公司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。