TravelSky Technology's (HKG:696) stock is up by a considerable 24% over the past three months. However, we decided to pay attention to the company's fundamentals which don't appear to give a clear sign about the company's financial health. Particularly, we will be paying attention to TravelSky Technology's ROE today.
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
Check out our latest analysis for TravelSky Technology
How To Calculate Return On Equity?
The formula for ROE is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for TravelSky Technology is:
3.2% = CN¥611m ÷ CN¥19b (Based on the trailing twelve months to December 2021).
The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every HK$1 worth of equity, the company was able to earn HK$0.03 in profit.
What Has ROE Got To Do With Earnings Growth?
So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. 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.
TravelSky Technology's Earnings Growth And 3.2% ROE
It is quite clear that TravelSky Technology's ROE is rather low. Even when compared to the industry average of 9.3%, the ROE figure is pretty disappointing. Given the circumstances, the significant decline in net income by 24% seen by TravelSky Technology over the last five years is not surprising. We reckon that there could also be other factors at play here. Such as - low earnings retention or poor allocation of capital.
That being said, we compared TravelSky Technology's performance with the industry and were concerned when we found that while the company has shrunk its earnings, the industry has grown its earnings at a rate of 6.0% in the same period.
SEHK:696 Past Earnings Growth August 8th 2022
Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. Is TravelSky Technology fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is TravelSky Technology Making Efficient Use Of Its Profits?
In spite of a normal three-year median payout ratio of 33% (that is, a retention ratio of 67%), the fact that TravelSky Technology's earnings have shrunk is quite puzzling. So there might be other factors at play here which could potentially be hampering growth. For example, the business has faced some headwinds.
Additionally, TravelSky Technology has paid dividends over a period of at least ten years, which means that the company's management is determined to pay dividends even if it means little to no earnings growth. Based on the latest analysts' estimates, we found that the company's future payout ratio over the next three years is expected to hold steady at 33%. However, TravelSky Technology's ROE is predicted to rise to 10% despite there being no anticipated change in its payout ratio.
Summary
On the whole, we feel that the performance shown by TravelSky Technology can be open to many interpretations. While the company does have a high rate of profit retention, its low rate of return is probably hampering its earnings growth. Having said that, looking at current analyst estimates, we found that the company's earnings growth rate is expected to see a huge improvement. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page 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.
TravelSky Technology(HKG:696)的股票在過去三個月中大幅上漲了24%。然而,我們決定關注該公司的基本面,這些基本面似乎並未給出該公司財務健康狀況的明確跡象。特別是,今天我們將關注TravelSky Technology的ROE。
股本回報率(ROE)是對一家公司增值和管理投資者資金的效率的測試。簡而言之,淨資產收益率顯示了每一美元相對於其股東投資產生的利潤。
查看我們對TravelSky Technology的最新分析
如何計算股本回報率?
這個淨資產收益率公式是:
股本回報率=(持續經營的)淨利潤?股東權益
因此,根據上面的公式,TravelSky科技的ROE為:
3.2%=CN元6.11億×CN元19B(以截至2021年12月的12個月為基礎)。
“報税表”是過去12個月的税後收入。另一種説法是,該公司每持有價值1港元的股票,就能賺取0.03港元的利潤。
淨資產收益率與盈利增長有什麼關係?
到目前為止,我們瞭解到淨資產收益率是衡量一家公司盈利能力的指標。根據公司將這些利潤再投資或“保留”多少,以及這樣做的效率如何,我們就能夠評估一家公司的收益增長潛力。一般來説,在其他條件相同的情況下,股本回報率和利潤留存較高的公司比不具備這些特徵的公司有更高的增長率。
TravelSky Technology的收益增長和3.2%的淨資產收益率
很明顯,TravelSky Technology的淨資產收益率(ROE)相當低。即使與9.3%的行業平均水平相比,淨資產收益率數字也相當令人失望。在這種情況下,TravelSky Technology在過去五年中淨收入大幅下降24%並不令人意外。我們認為,可能還有其他因素在起作用。例如-低收益留存或資本分配不佳。
話雖如此,我們將TravelSky Technology的表現與行業進行了比較,當我們發現儘管該公司的收益有所縮水,但該行業同期的收益以6.0%的速度增長時,我們感到擔憂。
聯交所:696過去盈利增長2022年8月8日
盈利增長是股票估值的一個重要因素。投資者應該嘗試確定預期的收益增長或下降是否已計入價格,無論是哪種情況。這樣做將有助於他們確定該股的未來看起來是光明的還是不祥的。與其他公司相比,TravelSky科技的估值是否公平?這3個估值指標可能會幫助你做出決定。
TravelSky科技公司是否有效地利用了其利潤?
儘管正常的三年中值派息率為33%(即留存率為67%),但TravelSky Technology的收益縮水的事實相當令人費解。因此,可能還有其他因素在起作用,可能會阻礙經濟增長。例如,該業務一直面臨一些不利因素。
此外,TravelSky Technology在至少十年的時間裏支付了股息,這意味着公司管理層決心支付股息,即使這意味着收益幾乎沒有增長。根據最新的分析師預估,我們發現該公司未來三年的派息比率預計將穩定在33%。然而,TravelSky Technology的淨資產收益率預計將上升至10%,儘管其派息率沒有預期的變化。
摘要
總體來説,我們覺得TravelSky科技展示的表現可以有多種解讀。雖然該公司的利潤留存率確實很高,但其低迴報率可能正在阻礙其收益增長。話雖如此,看看目前分析師的預估,我們發現該公司的盈利增長率預計將出現巨大改善。這些分析師的預期是基於對該行業的廣泛預期,還是基於該公司的基本面?點擊此處進入我們分析師對該公司的預測頁面。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。