With its stock down 12% over the past three months, it is easy to disregard AIA Group (HKG:1299). It is possible that the markets have ignored the company's differing financials and decided to lean-in to the negative sentiment. Fundamentals usually dictate market outcomes so it makes sense to study the company's financials. Specifically, we decided to study AIA Group'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 simpler terms, it measures the profitability of a company in relation to shareholder's equity.
See our latest analysis for AIA Group
How To 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 AIA Group is:
8.8% = US$3.7b ÷ US$41b (Based on the trailing twelve months to June 2022).
The 'return' refers to a company's earnings over the last year. So, this means that for every HK$1 of its shareholder's investments, the company generates a profit of HK$0.09.
Why Is ROE Important For Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. 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.
AIA Group's Earnings Growth And 8.8% ROE
When you first look at it, AIA Group's ROE doesn't look that attractive. Yet, a closer study shows that the company's ROE is similar to the industry average of 7.6%. We can see that AIA Group has grown at a five year net income growth average rate of 3.6%, which is a bit on the lower side. Remember, the company's ROE is not particularly great to begin with. Hence, this does provide some context to low earnings growth seen by the company.
We then compared AIA Group's net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 4.6% in the same period, which is a bit concerning.
SEHK:1299 Past Earnings Growth November 9th 2022
Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. Is 1299 fairly valued? This infographic on the company's intrinsic value has everything you need to know.
Is AIA Group Making Efficient Use Of Its Profits?
While AIA Group has a decent three-year median payout ratio of 36% (or a retention ratio of 64%), it has seen very little growth in earnings. So there could be some other explanation in that regard. For instance, the company's business may be deteriorating.
In addition, AIA Group has been paying dividends over a period of at least ten years suggesting that keeping up dividend payments is way more important to the management even if it comes at the cost of business growth. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 34%. Regardless, the future ROE for AIA Group is predicted to rise to 16% despite there being not much change expected in its payout ratio.
Conclusion
On the whole, we feel that the performance shown by AIA Group can be open to many interpretations. While the company does have a high rate of profit retention, its low rate of return is probably hampering its earnings growth. Having said that, looking at the current analyst estimates, we found that the company's earnings are expected to gain momentum. 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.
在過去三個月其股價下跌12%的情況下,很容易忽視友邦保險(HKG:1299)。市場可能忽視了該公司不同的財務狀況,決定向負面情緒傾斜。基本面通常決定市場結果,因此研究該公司的財務狀況是有意義的。具體地説,我們決定在本文中研究友邦保險的淨資產收益率。
股本回報率或淨資產收益率是股東要考慮的一個重要因素,因為它告訴他們他們的資本再投資的效率。簡而言之,它衡量的是一家公司相對於股東權益的盈利能力。
參見我們對友邦保險的最新分析
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,友邦保險的淨資產收益率為:
8.8%=37億美元×410億美元(基於截至2022年6月的12個月的往績)。
“回報”指的是一家公司過去一年的收益。因此,這意味着股東每投資1港元,公司就會產生0.09港元的利潤。
為什麼淨資產收益率對收益增長很重要?
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。我們現在需要評估公司將多少利潤再投資或“保留”用於未來的增長,這就讓我們對公司的增長潛力有了一個瞭解。假設其他條件相同,與沒有相同特徵的公司相比,擁有更高股本回報率和更高利潤保留率的公司通常會有更高的增長率。
友邦保險的盈利增長和8.8%的淨資產收益率
乍一看,友邦保險的ROE看起來並沒有那麼吸引人。然而,一項更仔細的研究顯示,該公司的淨資產收益率接近7.6%的行業平均水平。我們可以看到,友邦保險五年的淨收入平均增長率為3.6%,有點偏低。請記住,該公司的淨資產收益率從一開始就不是特別高。因此,這確實為該公司看到的低收益增長提供了一些背景。
然後我們將友邦保險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4.6%的行業平均增長率,這有點令人擔憂。
聯交所:1299過去盈利增長2022年11月9日
盈利增長是評估一隻股票時需要考慮的一個重要指標。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。這樣做將有助於他們確定該股的未來看起來是光明的還是不祥的。1299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。
友邦保險是否有效利用了它的利潤?
雖然友邦保險的三年中值派息率為36%(或留存率為64%),但它的收益增長很小。因此,在這方面可能有一些其他的解釋。例如,該公司的業務可能正在惡化。
此外,友邦保險在至少十年的時間裏一直在分紅,這表明繼續支付股息對管理層來説要重要得多,即使這是以業務增長為代價的。我們最新的分析師數據顯示,該公司未來三年的派息率預計約為34%。無論如何,儘管友邦保險的派息率預計不會有太大變化,但其未來的淨資產收益率預計將升至16%。
結論
總體來説,我們覺得友邦保險表現出來的表演可以有很多解讀。雖然該公司的利潤留存率確實很高,但其低迴報率可能正在阻礙其收益增長。話雖如此,但從目前分析師的預估來看,我們發現該公司的盈利勢頭有望增強。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。