With its stock down 23% over the past three months, it is easy to disregard Jiangsu Lopal Tech (SHSE:603906). However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Specifically, we decided to study Jiangsu Lopal Tech's ROE in this article.
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.
See our latest analysis for Jiangsu Lopal Tech
How Is ROE Calculated?
ROE 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 Jiangsu Lopal Tech is:
17% = CN¥883m ÷ CN¥5.3b (Based on the trailing twelve months to June 2022).
The 'return' is the profit over the last twelve months. Another way to think of that is that for every CN¥1 worth of equity, the company was able to earn CN¥0.17 in profit.
Why Is ROE Important For Earnings Growth?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. 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 Jiangsu Lopal Tech's Earnings Growth And 17% ROE
To begin with, Jiangsu Lopal Tech seems to have a respectable ROE. Especially when compared to the industry average of 11% the company's ROE looks pretty impressive. This certainly adds some context to Jiangsu Lopal Tech's exceptional 41% net income growth seen over the past five years. However, there could also be other causes behind this 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 Jiangsu Lopal Tech's growth is quite high when compared to the industry average growth of 20% in the same period, which is great to see.
SHSE:603906 Past Earnings Growth October 25th 2022
Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Jiangsu Lopal Tech is trading on a high P/E or a low P/E, relative to its industry.
Is Jiangsu Lopal Tech Using Its Retained Earnings Effectively?
Jiangsu Lopal Tech's three-year median payout ratio to shareholders is 25%, which is quite low. This implies that the company is retaining 75% of its profits. This suggests that the management is reinvesting most of the profits to grow the business as evidenced by the growth seen by the company.
Moreover, Jiangsu Lopal Tech is determined to keep sharing its profits with shareholders which we infer from its long history of four years of paying a dividend.
Summary
Overall, we are quite pleased with Jiangsu Lopal Tech's performance. 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 substantial growth in its earnings. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page 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.
在過去的三個月裏,江蘇羅派科技的股價下跌了23%,人們很容易忽視江蘇羅派科技(上交所:603906)。然而,仔細看看它穩健的財務狀況可能會讓你重新考慮。鑑於基本面因素通常會推動長期市場結果,該公司值得關注。具體地説,我們決定在本文中研究江蘇羅派科技的淨資產收益率。
股本回報率(ROE)是用來評估公司管理層利用公司資本效率的關鍵指標。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。
查看我們對江蘇羅帕爾科技的最新分析
淨資產收益率是如何計算的?
可使用以下公式計算淨資產收益率:
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,江蘇羅帕爾科技的淨資產收益率為:
17%=CN元8.83億×CN元53億元(基於截至2022年6月的12個月)。
“收益”是過去12個月的利潤。另一種説法是,公司每持有價值1元的股權,就能賺取0.17元的利潤。
為什麼淨資產收益率對收益增長很重要?
到目前為止,我們已經瞭解到淨資產收益率衡量的是一家公司創造利潤的效率。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。
江蘇羅派科技盈利增長與淨資產收益率17%的並列比較
首先,江蘇羅帕爾科技似乎擁有令人尊敬的淨資產收益率。特別是與11%的行業平均水平相比,該公司的淨資產收益率(ROE)看起來相當令人印象深刻。這無疑為江蘇羅帕爾科技在過去五年中41%的淨利潤增長提供了一些背景。然而,這種增長背後也可能有其他原因。例如,該公司的派息率較低或管理效率較高。
接下來,對比行業淨收入增長,我們發現江蘇羅帕爾科技的增長與同期20%的行業平均增長相比是相當高的,這是非常可喜的。
上證綜指:過去603906的收益增長2022年10月25日
盈利增長是股票估值的一個重要因素。投資者下一步需要確定的是,預期的收益增長是否已經計入了股價。通過這樣做,他們將知道股票是將進入清澈的藍色水域,還是等待沼澤水域。衡量預期收益增長的一個很好的指標是市盈率,它根據一隻股票的盈利前景決定市場願意為其支付的價格。因此,你可能想看看江蘇羅帕爾科技相對於其行業是高市盈率還是低市盈率。
江蘇羅派科技是否有效地利用了其留存收益?
江蘇羅帕爾科技對股東的三年派息率中值為25%,相當低。這意味着該公司將保留75%的利潤。這表明管理層正在將大部分利潤進行再投資,以實現業務增長,公司的增長就是明證。
此外,江蘇羅帕爾科技決心繼續與股東分享利潤,這是我們從其支付股息的悠久歷史中推斷出來的。
摘要
總體而言,我們對江蘇羅帕爾科技的表現相當滿意。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大幅增長。話雖如此,最新的行業分析師預測顯示,該公司的收益增長預計將放緩。這些分析師的預期是基於對該行業的廣泛預期,還是基於該公司的基本面?點擊此處進入我們分析師對該公司的預測頁面。
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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。