It is hard to get excited after looking at Gan & Lee Pharmaceuticals' (SHSE:603087) recent performance, when its stock has declined 18% over the past three months. It is possible that the markets have ignored the company's differing financials and decided to lean-in to the negative sentiment. Long-term fundamentals are usually what drive market outcomes, so it's worth paying close attention. Specifically, we decided to study Gan & Lee Pharmaceuticals' 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. Put another way, it reveals the company's success at turning shareholder investments into profits.
Check out our latest analysis for Gan & Lee Pharmaceuticals
How Is ROE Calculated?
The formula for return on equity is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Gan & Lee Pharmaceuticals is:
9.0% = CN¥882m ÷ CN¥9.8b (Based on the trailing twelve months to June 2022).
The 'return' is the yearly profit. That means that for every CN¥1 worth of shareholders' equity, the company generated CN¥0.09 in profit.
What Has ROE Got To Do With Earnings Growth?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. 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. 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.
Gan & Lee Pharmaceuticals' Earnings Growth And 9.0% ROE
On the face of it, Gan & Lee Pharmaceuticals' ROE is not much to talk about. Yet, a closer study shows that the company's ROE is similar to the industry average of 10%. On the other hand, Gan & Lee Pharmaceuticals reported a fairly low 4.8% net income growth over the past five years. Remember, the company's ROE is not particularly great to begin with. So this could also be one of the reasons behind the company's low growth in earnings.
Next, on comparing with the industry net income growth, we found that Gan & Lee Pharmaceuticals' reported growth was lower than the industry growth of 21% in the same period, which is not something we like to see.
SHSE:603087 Past Earnings Growth September 13th 2022
Earnings growth is a huge factor in stock valuation. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. Is Gan & Lee Pharmaceuticals fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Gan & Lee Pharmaceuticals Making Efficient Use Of Its Profits?
Gan & Lee Pharmaceuticals' low three-year median payout ratio of 16% (or a retention ratio of 84%) should mean that the company is retaining most of its earnings to fuel its growth. However, the low earnings growth number doesn't reflect this fact. So there might be other factors at play here which could potentially be hampering growth. For example, the business has faced some headwinds.
Additionally, Gan & Lee Pharmaceuticals started paying a dividend only recently. So it looks like the management must have perceived that shareholders favor dividends over earnings growth.
Summary
Overall, we have mixed feelings about Gan & Lee Pharmaceuticals. While the company does have a high rate of reinvestment, the low ROE means that all that reinvestment is not reaping any benefit to its investors, and moreover, its having a negative impact on the earnings growth. That being so, the latest analyst forecasts show that the company will continue to see an expansion in its earnings. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts 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.
看到Gan&Lee PharmPharmticals(上海证券交易所股票代码:603087)最近的表现,很难感到兴奋,它的股票在过去三个月里下跌了18%。市场可能忽视了该公司不同的财务状况,决定向负面情绪倾斜。长期基本面通常是推动市场结果的因素,因此值得密切关注。具体地说,我们决定在本文中研究Gan&Lee制药公司的净资产收益率。
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。换句话说,它揭示了该公司成功地将股东投资转化为利润。
查看我们对甘利制药的最新分析
净资产收益率是如何计算的?
这个股本回报率公式是:
股本回报率=(持续经营的)净利润?股东权益
因此,根据上述公式,甘利制药的净资产收益率为:
9.0%=CN元8.82亿×CN元98亿元(基于截至2022年6月的12个月)。
“回报”就是年度利润。这意味着,股东权益每增加1元,公司就会产生0.09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,我们已经了解到净资产收益率衡量的是一家公司创造利润的效率。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。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。
安利制药的盈利增长和9.0%的净资产收益率
从表面上看,赣利制药的净资产收益率(ROE)没有太多可谈的。然而,一项更仔细的研究表明,该公司的净资产收益率接近10%的行业平均水平。另一方面,Gan&Lee制药公司报告称,过去五年的净收入增长相当低,为4.8%。请记住,该公司的净资产收益率从一开始就不是特别高。因此,这也可能是该公司盈利增长缓慢的原因之一。
接下来,对比行业净收入增长,我们发现,甘利医药的报告增长低于同期行业21%的增长,这是我们不愿意看到的。
上海证券交易所:过去603087的收益增长2022年9月13日
盈利增长是股票估值的一个重要因素。对于投资者来说,重要的是知道市场是否已经消化了公司预期的收益增长(或下降)。这有助于他们确定这只股票是为光明还是黯淡的未来做准备。与其他公司相比,甘利制药的估值是否公平?这3个估值指标可能会帮助你做出决定。
甘利制药是否在有效利用其利润?
Gan&Lee PharmPharmticals较低的三年派息率中值为16%(或留存比率为84%),这应该意味着该公司将保留大部分收益来推动其增长。然而,较低的盈利增长数字并不能反映这一事实。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,Gan&Lee制药公司最近才开始派发股息。因此,看起来管理层肯定已经意识到,股东更喜欢分红,而不是收益增长。
摘要
总体而言,我们对甘利制药有复杂的感受。虽然该公司的再投资率确实很高,但低ROE意味着所有的再投资都没有给投资者带来任何好处,而且对收益增长产生了负面影响。既然如此,最新的分析师预测显示,该公司的收益将继续增长。要了解更多分析师对该公司的最新预测,请查看分析师对该公司预测的可视化。
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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。