Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Basically this means that a company has profitable initiatives that it can continue to reinvest in, which is a trait of a compounding machine. Although, when we looked at China Resources Power Holdings (HKG:836), it didn't seem to tick all of these boxes.
Understanding Return On Capital Employed (ROCE)
Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for China Resources Power Holdings:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.021 = HK$4.5b ÷ (HK$283b - HK$70b) (Based on the trailing twelve months to June 2022).
Therefore, China Resources Power Holdings has an ROCE of 2.1%. In absolute terms, that's a low return and it also under-performs the Renewable Energy industry average of 6.8%.
Check out our latest analysis for China Resources Power Holdings
SEHK:836 Return on Capital Employed September 14th 2022
Above you can see how the current ROCE for China Resources Power Holdings compares to its prior returns on capital, but there's only so much you can tell from the past. If you're interested, you can view the analysts predictions in our free report on analyst forecasts for the company.
What Can We Tell From China Resources Power Holdings' ROCE Trend?
When we looked at the ROCE trend at China Resources Power Holdings, we didn't gain much confidence. To be more specific, ROCE has fallen from 8.5% over the last five years. However, given capital employed and revenue have both increased it appears that the business is currently pursuing growth, at the consequence of short term returns. If these investments prove successful, this can bode very well for long term stock performance.
What We Can Learn From China Resources Power Holdings' ROCE
While returns have fallen for China Resources Power Holdings in recent times, we're encouraged to see that sales are growing and that the business is reinvesting in its operations. In light of this, the stock has only gained 40% over the last five years. Therefore we'd recommend looking further into this stock to confirm if it has the makings of a good investment.
If you want to know some of the risks facing China Resources Power Holdings we've found 3 warning signs (1 shouldn't be ignored!) that you should be aware of before investing here.
If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.
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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.
找到一傢俱有大幅增長潛力的企業並非易事,但如果我們看看幾個關鍵的財務指標,這是可能的。理想情況下,一家企業將呈現兩種趨勢;第一,增長退貨關於已使用資本(ROCE),第二,增加金額已動用資本的比例。基本上,這意味着一家公司有盈利的舉措,可以繼續進行再投資,這是複合機器的一個特點。雖然,當我們看到華潤電力(HKG:836),它似乎沒有勾選所有這些框。
瞭解資本回報率(ROCE)
如果您不確定,只需澄清一下,ROCE是一種評估公司投資於其業務的資本獲得多少税前收入(按百分比計算)的指標。分析人士用這個公式為華潤電力計算:
已動用資本回報率=息税前收益(EBIT)?(總資產-流動負債)
0.021=港幣45億?(港幣2,830億-700億)(根據截至2022年6月的往績12個月計算).
所以呢,華潤電力的淨資產收益率為2.1%。按絕對值計算,這是一個較低的回報率,也低於可再生能源行業6.8%的平均水平。
看看我們對華潤電力的最新分析
聯交所:836已動用資本回報率2022年9月14日
上面你可以看到華潤電力目前的淨資產收益率與之前的資本回報率相比如何,但你只能從過去知道這麼多。如果您感興趣,您可以在我們的免費分析師對該公司的預測報告。
從華潤電力的ROCE趨勢中我們能看出什麼?
當我們看着華潤電力的ROCE趨勢時,我們並沒有獲得太多信心。更具體地説,ROCE在過去五年中從8.5%下降。然而,鑑於已動用資本和收入都有所增加,該業務目前似乎正在追求增長,這是短期回報的結果。如果這些投資被證明是成功的,這可能是長期股票表現的好兆頭。
我們可以從華潤電力的ROCE中學到什麼
雖然華潤電力最近的回報率有所下降,但我們看到銷售額在增長,公司正在對業務進行再投資,這讓我們感到鼓舞。有鑑於此,該股在過去五年中僅上漲了40%。因此,我們建議進一步研究這隻股票,以確認它是否具備良好的投資條件。
如果你想知道華潤電力面臨的一些風險,我們已經找到了3個警示標誌(1不應該被忽視!)在這裏投資之前你應該意識到這一點。
如果你想尋找收入豐厚的可靠公司,看看這個免費擁有良好資產負債表和可觀股本回報率的公司名單。
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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。