With its stock down 21% over the past three months, it is easy to disregard China Lesso Group Holdings (HKG:2128). But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals. Specifically, we decided to study China Lesso Group Holdings' ROE in this article.
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.
Check out our latest analysis for China Lesso Group Holdings
How To Calculate Return On Equity?
Return on equity can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for China Lesso Group Holdings is:
12% = CN¥2.5b ÷ CN¥22b (Based on the trailing twelve months to June 2022).
The 'return' is the yearly profit. That means that for every HK$1 worth of shareholders' equity, the company generated HK$0.12 in profit.
What Has ROE Got To Do With Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. 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. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.
A Side By Side comparison of China Lesso Group Holdings' Earnings Growth And 12% ROE
To begin with, China Lesso Group Holdings seems to have a respectable ROE. Yet, the fact that the company's ROE is lower than the industry average of 15% does temper our expectations. China Lesso Group Holdings was still able to see a decent net income growth of 9.6% over the past five years. We reckon that there could be other factors at play here. Such as - high earnings retention or an efficient management in place. Bear in mind, the company does have a respectable level of ROE. It is just that the industry ROE is higher. So this also provides some context to the earnings growth seen by the company.
We then compared China Lesso Group Holdings' net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 15% in the same period, which is a bit concerning.
SEHK:2128 Past Earnings Growth September 22nd 2022
Earnings growth is an important metric to consider when valuing a stock. 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. Has the market priced in the future outlook for 2128? You can find out in our latest intrinsic value infographic research report.
Is China Lesso Group Holdings Efficiently Re-investing Its Profits?
While the company did pay out a portion of its dividend in the past, it currently doesn't pay a dividend. We infer that the company has been reinvesting all of its profits to grow its business.
Summary
Overall, we feel that China Lesso Group Holdings certainly does have some positive factors to consider. Particularly, its earnings have grown respectably as we saw earlier, which was likely achieved due to the company reinvesting most of its earnings at a decent rate of return, to grow its business. Having said that, looking at the current analyst estimates, we found that the company's earnings are expected to gain momentum. 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.
在过去三个月其股价下跌21%的情况下,很容易忽视中国乐购集团控股公司(HKG:2128)。但如果你密切关注,你可能会发现,该公司的关键财务指标看起来相当不错,这可能意味着,鉴于市场通常会奖励更具弹性的长期基本面因素,该股可能会在长期内上涨。具体地说,我们决定在本文中研究中国乐购集团控股的净资产收益率。
股本回报率(ROE)是用来评估公司管理层利用公司资本效率的关键指标。换句话说,这是一个衡量公司股东提供的资本回报率的盈利比率。
查看我们对中国乐购集团控股的最新分析
如何计算股本回报率?
股本回报率可使用以下公式计算:
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,中国乐购集团控股的净资产收益率为:
12%=25亿元×220亿元(以截至2022年6月的12个月为基础)。
“回报”就是年度利润。这意味着,每1港元的股东权益,该公司就会产生0.12港元的利润。
净资产收益率与盈利增长有什么关系?
我们已经证实,净资产收益率是一家公司未来收益的有效盈利指标。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。假设其他条件不变,净资产收益率和利润保留率越高,与不一定具有这些特征的公司相比,公司的增长率就越高。
中国乐购集团控股盈利增长与12%净资产收益率的并列比较
首先,中国乐购集团控股似乎拥有可观的净资产收益率。然而,该公司的净资产收益率低于15%的行业平均水平,这一事实确实降低了我们的预期。中国乐购集团控股有限公司在过去五年中仍然能够实现9.6%的可观净利润增长。我们认为,可能还有其他因素在起作用。例如-高收益留存或有效的管理到位。请记住,该公司确实有相当高的净资产收益率水平。只是行业的净资产收益率更高。因此,这也为该公司看到的收益增长提供了一些背景。
然后,我们将中国乐购集团控股的净收入增长与行业进行了比较,发现该公司的增长数字低于同期15%的行业平均增长率,这有点令人担忧。
联交所:2128过去盈利增长2022年9月22日
盈利增长是评估一只股票时需要考虑的一个重要指标。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。市场是否已经消化了2128的未来前景?你可以在我们最新的内在价值信息图研究报告中找到答案。
中国乐购集团控股有限公司是否有效地将其利润进行了再投资?
虽然该公司过去确实支付了一部分股息,但目前不支付股息。我们推断,该公司一直在将所有利润进行再投资,以发展业务。
摘要
总体而言,我们认为中国乐购集团控股确实有一些积极的因素需要考虑。特别是,正如我们早先看到的那样,该公司的收益增长可观,这可能是因为该公司将大部分收益以可观的回报率进行再投资,以增长其业务。话虽如此,但从目前分析师的预估来看,我们发现该公司的盈利势头有望增强。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。