Li Ning's (HKG:2331) stock is up by a considerable 36% over the past three months. Since the market usually pay for a company's long-term fundamentals, we decided to study the company's key performance indicators to see if they could be influencing the market. Specifically, we decided to study Li Ning's ROE in this article.
Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
Check out our latest analysis for Li Ning
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 Li Ning is:
19% = CN¥4.2b ÷ CN¥22b (Based on the trailing twelve months to June 2022).
The 'return' is the income the business earned over the last year. So, this means that for every HK$1 of its shareholder's investments, the company generates a profit of HK$0.19.
Why Is ROE Important For Earnings Growth?
So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.
A Side By Side comparison of Li Ning's Earnings Growth And 19% ROE
To begin with, Li Ning seems to have a respectable ROE. On comparing with the average industry ROE of 11% the company's ROE looks pretty remarkable. This probably laid the ground for Li Ning's significant 45% net income growth seen over the past five years. We believe that there might also be other aspects that are positively influencing the company's earnings growth. For instance, the company has a low payout ratio or is being managed efficiently.
Next, on comparing with the industry net income growth, we found that Li Ning's growth is quite high when compared to the industry average growth of 0.3% in the same period, which is great to see.
SEHK:2331 Past Earnings Growth August 27th 2022
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. Has the market priced in the future outlook for 2331? You can find out in our latest intrinsic value infographic research report.
Is Li Ning Using Its Retained Earnings Effectively?
Li Ning has a really low three-year median payout ratio of 25%, meaning that it has the remaining 75% left over to reinvest into its business. So it seems like the management is reinvesting profits heavily to grow its business and this reflects in its earnings growth number.
Additionally, Li Ning has paid dividends over a period of three years which means that the company is pretty serious about sharing its profits with shareholders. Looking at the current analyst consensus data, we can see that the company's future payout ratio is expected to rise to 33% over the next three years. Regardless, the ROE is not expected to change much for the company despite the higher expected payout ratio.
Conclusion
On the whole, we feel that Li Ning's performance has been quite good. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. 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.
李宁(HKG:2331)的股票在过去三个月里上涨了36%。由于市场通常为公司的长期基本面买单,我们决定研究公司的关键业绩指标,看看它们是否会影响市场。具体地说,我们决定在本文中研究李宁的净资产收益率。
股本回报率或净资产收益率是股东要考虑的一个重要因素,因为它告诉他们他们的资本再投资的效率。简而言之,净资产收益率显示了每一美元相对于其股东投资产生的利润。
看看我们对李宁的最新分析
如何计算股本回报率?
这个净资产收益率公式是:
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,李宁的净资产收益率为:
19%=CN元42亿×CN元220亿(以截至2022年6月的12个月为基础)。
“回报”指的是企业在过去一年中获得的收入。因此,这意味着股东每投资1港元,公司就会产生0.19港元的利润。
为什么净资产收益率对收益增长很重要?
到目前为止,我们了解到净资产收益率是衡量一家公司盈利能力的指标。根据公司选择再投资或“保留”多少利润,我们就能够评估一家公司未来产生利润的能力。假设其他条件相同,与没有相同特征的公司相比,拥有更高股本回报率和更高利润保留率的公司通常会有更高的增长率。
李宁盈利增长与19%净资产收益率的并列比较
首先,李宁似乎有令人尊敬的净资产收益率。与11%的行业平均净资产收益率相比,该公司的净资产收益率看起来相当惊人。这可能为李宁在过去五年中净收入大幅增长45%奠定了基础。我们认为,可能还有其他方面正在积极影响公司的收益增长。例如,该公司的派息率较低或管理效率较高。
接下来,对比行业净收入增速,我们发现李宁的增速与同期0.3%的行业平均增速相比还是相当高的,可喜可贺。
联交所:2331过去盈利增长2022年8月27日
赋予一家公司价值的基础在很大程度上与其盈利增长挂钩。投资者下一步需要确定的是,预期的收益增长是否已经计入了股价。这样做将有助于他们确定该股的未来看起来是光明的还是不祥的。市场是否已经消化了2331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。
李宁是否有效地利用了留存收益?
李宁的三年中值派息率非常低,只有25%,这意味着它还有剩余的75%可以再投资于自己的业务。因此,管理层似乎正在对利润进行大量再投资,以增长业务,这反映在其收益增长数字上。
此外,李宁在三年内分红,这意味着公司对与股东分享利润相当认真。看看目前分析师的共识数据,我们可以看到,该公司未来三年的派息率预计将上升至33%。无论如何,尽管预期派息率较高,但预计公司的净资产收益率不会有太大变化。
结论
总体来说,我们觉得李宁的表现是相当不错的。特别是,很高兴看到该公司在业务上投入了大量资金,并获得了高回报率,这导致了其收益的可观增长。话虽如此,该公司的盈利增长预计将放缓,正如目前分析师预测的那样。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。