COFCO Engineering & Technology (SZSE:301058) has had a rough three months with its share price down 9.2%. However, the company's fundamentals look pretty decent, and long-term financials are usually aligned with future market price movements. Specifically, we decided to study COFCO Engineering & Technology's 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. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
Check out our latest analysis for COFCO Engineering & 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 COFCO Engineering & Technology is:
8.8% = CN¥171m ÷ CN¥1.9b (Based on the trailing twelve months to March 2022).
The 'return' is the amount earned after tax over the last twelve months. So, this means that for every CN¥1 of its shareholder's investments, the company generates a profit of CN¥0.09.
What Is The Relationship Between ROE And Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. 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. 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 COFCO Engineering & Technology's Earnings Growth And 8.8% ROE
At first glance, COFCO Engineering & Technology's ROE doesn't look very promising. However, its ROE is similar to the industry average of 8.0%, so we won't completely dismiss the company. Looking at COFCO Engineering & Technology's exceptional 29% five-year net income growth in particular, we are definitely impressed. Taking into consideration that the ROE is not particularly high, we reckon that there could also be other factors at play which could be influencing the company's growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.
As a next step, we compared COFCO Engineering & Technology's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 11%.
SZSE:301058 Past Earnings Growth August 23rd 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. Is COFCO Engineering & Technology fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is COFCO Engineering & Technology Making Efficient Use Of Its Profits?
COFCO Engineering & Technology has a three-year median payout ratio of 40% (where it is retaining 60% of its income) which is not too low or not too high. This suggests that its dividend is well covered, and given the high growth we discussed above, it looks like COFCO Engineering & Technology is reinvesting its earnings efficiently.
Summary
On the whole, we do feel that COFCO Engineering & Technology has some positive attributes. With a high rate of reinvestment, albeit at a low ROE, the company has managed to see a considerable growth in its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.
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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.
中糧工程科技股份有限公司(SZSE:301058)經歷了艱難的三個月,股價下跌了9.2%。然而,該公司的基本面看起來相當不錯,長期財務狀況通常與未來的市場價格走勢保持一致。具體地説,我們決定在本文中研究中糧工程技術的淨資產收益率。
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,它是用來評估一家公司相對於其權益資本的盈利能力。
查看我們對中糧工程技術的最新分析
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,根據上述公式,中糧工程技術的淨資產收益率為:
8.8%=1.71億元×19億元(以截至2022年3月的12個月為基礎)。
“報税表”是過去12個月的税後收入。因此,這意味着股東每投資1元人民幣,公司就會產生0.09元的利潤。
淨資產收益率與盈利增長之間有什麼關係?
我們已經證實,淨資產收益率是一家公司未來收益的有效盈利指標。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。假設其他條件不變,淨資產收益率和利潤保留率越高,與不一定具有這些特徵的公司相比,公司的增長率就越高。
中糧工程技術盈利增長與淨資產收益率8.8%的並列比較
乍一看,中糧工程技術的淨資產收益率看起來並不是很有希望。不過,其淨資產收益率接近8.0%的行業平均水平,因此我們不會完全對該公司不屑一顧。特別是看到中糧工程技術有限公司五年來29%的非凡淨利潤增長,我們肯定印象深刻。考慮到淨資產收益率不是特別高,我們認為也可能有其他因素在發揮作用,可能正在影響公司的增長。例如,公司管理層可能做出了一些良好的戰略決策,或者公司的派息率較低。
下一步,我們將中糧工程技術的淨收入增長與行業進行了比較,令人欣喜的是,我們發現該公司的增長高於行業平均11%的增長。
深圳證交所:過去301058的收益增長2022年8月23日
盈利增長是評估一隻股票時需要考慮的一個重要指標。對於投資者來説,重要的是知道市場是否已經消化了公司預期的收益增長(或下降)。這有助於他們確定這隻股票是為光明還是黯淡的未來做準備。與其他公司相比,中糧工程技術公司的價值是否公平?這3個估值指標可能會幫助你做出決定。
中糧工程技術公司是否有效利用了利潤?
中糧工程技術的三年中值派息率為40%(該公司將保留60%的收入),這不是太低也不是太高。這表明它的股息得到了很好的覆蓋,考慮到我們上面討論的高增長,中糧工程科技似乎正在有效地對其收益進行再投資。
摘要
總體而言,我們確實感到中糧工程技術有一些積極的屬性。憑藉高再投資率,儘管淨資產收益率較低,該公司的收益實現了相當大的增長。儘管如此,最新的行業分析師預測顯示,該公司的收益預計將加速增長。要了解更多有關該公司未來收益增長預測的信息,請查看以下內容免費報告分析師對該公司的預測,以瞭解更多信息。
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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。