What are the early trends we should look for to identify a stock that could multiply in value over the long term? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. That's why when we briefly looked at Xingfa Aluminium Holdings' (HKG:98) ROCE trend, we were pretty happy with what we saw.
Understanding Return On Capital Employed (ROCE)
For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. To calculate this metric for Xingfa Aluminium Holdings, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.18 = CN¥1.0b ÷ (CN¥12b - CN¥6.9b) (Based on the trailing twelve months to June 2022).
So, Xingfa Aluminium Holdings has an ROCE of 18%. In absolute terms, that's a satisfactory return, but compared to the Metals and Mining industry average of 13% it's much better.
View our latest analysis for Xingfa Aluminium Holdings
SEHK:98 Return on Capital Employed September 2nd 2022
Historical performance is a great place to start when researching a stock so above you can see the gauge for Xingfa Aluminium Holdings' ROCE against it's prior returns. If you'd like to look at how Xingfa Aluminium Holdings has performed in the past in other metrics, you can view this free graph of past earnings, revenue and cash flow.
What Does the ROCE Trend For Xingfa Aluminium Holdings Tell Us?
While the returns on capital are good, they haven't moved much. The company has consistently earned 18% for the last five years, and the capital employed within the business has risen 139% in that time. 18% is a pretty standard return, and it provides some comfort knowing that Xingfa Aluminium Holdings has consistently earned this amount. Stable returns in this ballpark can be unexciting, but if they can be maintained over the long run, they often provide nice rewards to shareholders.
On a separate but related note, it's important to know that Xingfa Aluminium Holdings has a current liabilities to total assets ratio of 55%, which we'd consider pretty high. This effectively means that suppliers (or short-term creditors) are funding a large portion of the business, so just be aware that this can introduce some elements of risk. While it's not necessarily a bad thing, it can be beneficial if this ratio is lower.
In Conclusion...
The main thing to remember is that Xingfa Aluminium Holdings has proven its ability to continually reinvest at respectable rates of return. On top of that, the stock has rewarded shareholders with a remarkable 119% return to those who've held over the last five years. So even though the stock might be more "expensive" than it was before, we think the strong fundamentals warrant this stock for further research.
On a final note, we've found 1 warning sign for Xingfa Aluminium Holdings that we think you should be aware of.
While Xingfa Aluminium Holdings may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.
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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.
我們應該尋找哪些早期趨勢來識別一隻可能在長期內成倍增值的股票?一種常見的方法是嘗試找到一家擁有退貨已使用資本(ROCE)正在增加,同時也在增長金額已動用資本的比例。簡而言之,這些類型的企業是複利機器,這意味着它們不斷地以越來越高的回報率對收益進行再投資。這就是為什麼當我們短暫地查看興發鋁業控股有限公司(HKG:98)ROCE趨勢,我們對所看到的相當滿意。
瞭解資本回報率(ROCE)
對於那些不確定ROCE是什麼的人,它衡量的是一家公司可以從其業務中使用的資本產生的税前利潤。要計算興發鋁業控股的這一指標,公式如下:
已動用資本回報率=息税前收益(EBIT)?(總資產-流動負債)
0.18=CN元10億?(CN元120億-CN元69億)(根據截至2022年6月的往績12個月計算).
所以,興發鋁業控股的淨資產收益率為18%。就絕對值而言,這是一個令人滿意的回報率,但與金屬和礦業13%的平均回報率相比,這要好得多。
查看我們對興發鋁業控股的最新分析
聯交所:98已動用資本回報率2022年9月2日
在研究一隻股票時,歷史表現是一個很好的起點,因為在歷史表現上方,你可以看到興發鋁業控股公司的ROCE相對於它之前的回報的衡量標準。如果你想看看興發鋁業控股過去在其他指標上的表現,你可以查看以下內容免費過去收益、收入和現金流的圖表。
興發鋁業的ROCE走勢告訴了我們什麼?
雖然資本回報率不錯,但它們並沒有太大變動。該公司在過去五年中持續盈利18%,同期公司內部資本增長了139%。18%是一個相當標準的回報率,知道興發鋁業控股公司一直都能賺到這個數字,這讓人感到些許安慰。這樣的穩定回報可能並不令人興奮,但如果它們能夠長期保持下去,它們往往會為股東提供豐厚的回報。
在另外一個相關的問題上,重要的是要知道,興發鋁業控股公司的流動負債與總資產的比率為55%,我們認為這個比率相當高。這實際上意味着供應商(或短期債權人)正在為很大一部分業務提供資金,因此只需意識到這可能會帶來一些風險因素。雖然這不一定是一件壞事,但如果這一比例較低,它可能是有益的。
總之..。
要記住的主要一點是,興發鋁業控股公司已經證明瞭它有能力繼續以可觀的回報率進行再投資。最重要的是,與過去五年持有的股票相比,該股為股東帶來了高達119%的回報。因此,儘管這隻股票可能比以前更“昂貴”,但我們認為強勁的基本面為這隻股票提供了進一步研究的理由。
最後一點,我們發現興發鋁業控股公司的1個警告標誌我們認為你應該意識到。
雖然興發鋁業控股公司目前的回報率可能不是最高的,但我們已經編制了一份目前股本回報率超過25%的公司名單。看看這個免費在這裏列出。
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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。