It is hard to get excited after looking at Huaxin Cement's (SHSE:600801) recent performance, when its stock has declined 13% over the past three months. However, stock prices are usually driven by a company's financial performance over the long term, which in this case looks quite promising. Specifically, we decided to study Huaxin Cement's ROE in this article.
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.
Check out our latest analysis for Huaxin Cement
How Do You Calculate Return On Equity?
Return on equity can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Huaxin Cement is:
16% = CN¥4.8b ÷ CN¥29b (Based on the trailing twelve months to June 2022).
The 'return' refers to a company's earnings over the last year. Another way to think of that is that for every CN¥1 worth of equity, the company was able to earn CN¥0.16 in profit.
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. 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.
Huaxin Cement's Earnings Growth And 16% ROE
At first glance, Huaxin Cement seems to have a decent ROE. Especially when compared to the industry average of 9.8% the company's ROE looks pretty impressive. This probably laid the ground for Huaxin Cement's moderate 15% net income growth seen over the past five years.
We then compared Huaxin Cement's net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 21% in the same period, which is a bit concerning.
SHSE:600801 Past Earnings Growth October 13th 2022
The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. Is 600801 fairly valued? This infographic on the company's intrinsic value has everything you need to know.
Is Huaxin Cement Efficiently Re-investing Its Profits?
Huaxin Cement has a three-year median payout ratio of 40%, which implies that it retains the remaining 60% of its profits. This suggests that its dividend is well covered, and given the decent growth seen by the company, it looks like management is reinvesting its earnings efficiently.
Besides, Huaxin Cement has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Upon studying the latest analysts' consensus data, we found that the company is expected to keep paying out approximately 42% of its profits over the next three years. Accordingly, forecasts suggest that Huaxin Cement's future ROE will be 16% which is again, similar to the current ROE.
Summary
On the whole, we feel that Huaxin Cement's performance has been quite good. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see a good amount of growth in its earnings. That being so, the latest analyst forecasts show that the company will continue to see an expansion in its earnings. 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.
看到華信水泥(上海證券交易所股票代碼:600801)最近的表現,我們很難感到興奮,它的股價在過去三個月裏下跌了13%。然而,股價通常是由一家公司的長期財務表現推動的,在這種情況下,這看起來相當有希望。具體地説,我們決定在本文中研究華信水泥的淨資產收益率。
淨資產收益率,即股本回報率,是評估一家公司從股東那裏獲得投資回報的有效程度的有用工具。換句話説,這是一個衡量公司股東提供的資本回報率的盈利比率。
查看我們對華信水泥的最新分析
你如何計算股本回報率?
股本回報率可使用以下公式計算:
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,華信水泥的淨資產收益率為:
16%=CN元48億×CN元290億(以截至2022年6月的12個月為基礎)。
“回報”指的是一家公司過去一年的收益。另一種説法是,公司每持有價值1元的股權,就能賺取0.16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。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。
華信水泥盈利增長和16%的淨資產收益率
乍一看,華信水泥的淨資產收益率似乎還不錯。特別是與9.8%的行業平均水平相比,該公司的淨資產收益率看起來相當令人印象深刻。這可能為過去五年華信水泥15%的淨利潤温和增長奠定了基礎。
然後我們將華信水泥的淨收入增長與行業進行了比較,發現該公司的增長數字低於同期21%的行業平均增長率,這有點令人擔憂。
上海證券交易所:過去600801的收益增長2022年10月13日
賦予一家公司價值的基礎在很大程度上與其盈利增長掛鈎。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。600801的價值公平嗎?這張關於公司內在價值的信息圖包含了你需要知道的一切。
華信水泥是否有效地將利潤進行了再投資?
華信水泥的三年派息率中值為40%,這意味着它保留了剩餘60%的利潤。這表明,它的股息得到了很好的覆蓋,考慮到該公司看到的可觀增長,管理層似乎正在有效地對其收益進行再投資。
此外,華信水泥至少在十年甚至更長的時間裏一直在分紅。這表明該公司致力於與股東分享利潤。在研究了最新的分析師共識數據後,我們發現,預計該公司將在未來三年繼續支付約42%的利潤。相應地,預測顯示,華信水泥未來的淨資產收益率將為16%,與目前的淨資產收益率相似。
摘要
整體而言,我們覺得華信水泥的表現相當不錯。具體地説,我們喜歡該公司將一大筆利潤以高回報率進行再投資。當然,這導致該公司的收益出現了可觀的增長。既然如此,最新的分析師預測顯示,該公司的收益將繼續增長。要了解更多分析師對該公司的最新預測,請查看分析師對該公司預測的可視化。
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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。