If you're looking for a multi-bagger, there's a few things to keep an eye out for. Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after briefly looking over the numbers, we don't think Guangdong Champion Asia ElectronicsLtd (SHSE:603386) has the makings of a multi-bagger going forward, but let's have a look at why that may be.
Return On Capital Employed (ROCE): What Is It?
If you haven't worked with ROCE before, it measures the 'return' (pre-tax profit) a company generates from capital employed in its business. To calculate this metric for Guangdong Champion Asia ElectronicsLtd, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.08 = CN¥142m ÷ (CN¥3.5b - CN¥1.7b) (Based on the trailing twelve months to September 2022).
So, Guangdong Champion Asia ElectronicsLtd has an ROCE of 8.0%. In absolute terms, that's a low return but it's around the Electronic industry average of 6.9%.
View our latest analysis for Guangdong Champion Asia ElectronicsLtd
SHSE:603386 Return on Capital Employed December 23rd 2022
While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how Guangdong Champion Asia ElectronicsLtd has performed in the past in other metrics, you can view this free graph of past earnings, revenue and cash flow.
So How Is Guangdong Champion Asia ElectronicsLtd's ROCE Trending?
In terms of Guangdong Champion Asia ElectronicsLtd's historical ROCE movements, the trend isn't fantastic. Over the last five years, returns on capital have decreased to 8.0% from 12% five years ago. Meanwhile, the business is utilizing more capital but this hasn't moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line.
On a side note, Guangdong Champion Asia ElectronicsLtd's current liabilities are still rather high at 49% of total assets. 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. Ideally we'd like to see this reduce as that would mean fewer obligations bearing risks.
In Conclusion...
Bringing it all together, while we're somewhat encouraged by Guangdong Champion Asia ElectronicsLtd's reinvestment in its own business, we're aware that returns are shrinking. Since the stock has declined 13% over the last five years, investors may not be too optimistic on this trend improving either. Therefore based on the analysis done in this article, we don't think Guangdong Champion Asia ElectronicsLtd has the makings of a multi-bagger.
Guangdong Champion Asia ElectronicsLtd does have some risks though, and we've spotted 3 warning signs for Guangdong Champion Asia ElectronicsLtd that you might be interested in.
While Guangdong Champion Asia ElectronicsLtd isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
如果你正在寻找一个多袋子，有几个东西需要注意。理想情况下，一家企业将呈现两种趋势；第一，增长退货关于已使用资本(ROCE)，第二，增加金额已动用资本的比例。如果你看到这个，通常意味着它是一家拥有出色商业模式和大量有利可图的再投资机会的公司。然而，在简单地看了一下数字之后，我们认为广东冠亚电子有限公司(上海证券交易所：603386)未来有可能成为一个多袋子的人，但让我们看看为什么会这样。
资本回报率(ROCE)：它是什么？
如果你以前没有使用过ROCE，它衡量的是一家公司从业务资本中获得的“回报”(税前利润)。要计算广东冠军亚洲电子有限公司的这一指标，公式如下：
已动用资本回报率=息税前收益(EBIT)？(总资产-流动负债)
0.08=人民币1.42亿？(人民币35亿元-人民币17亿元)(基于截至2022年9月的过去12个月).
所以,广东冠军亚洲电子有限公司的净资产收益率为8.0%。按绝对值计算，这是一个较低的回报率，但约为电子行业6.9%的平均水平。
查看我们对广东冠军亚洲电子有限公司的最新分析
上证所：2022年12月23日资本回报率603386
虽然过去并不代表未来，但了解一家公司历史上的表现是有帮助的，这就是为什么我们有上面的图表。如果你想看看广东冠军亚洲电子有限公司过去在其他指标上的表现，你可以查看以下内容免费过去收益、收入和现金流的图表。
那么，广东冠军亚洲电子有限公司的ROCE趋势如何？
就广东冠军亚洲电子有限公司历史上的ROCE运动而言，这一趋势并不美妙。过去五年，资本回报率从五年前的12%降至8.0%。与此同时，该公司正在利用更多资本，但这在过去12个月的销售额方面没有太大变化，因此这可能反映了较长期的投资。从现在开始，值得密切关注该公司的收益，看看这些投资最终是否真的为利润做出了贡献。
另外，广东冠军亚洲电子有限公司的流动负债仍相当高，占总资产的49%。这实际上意味着供应商(或短期债权人)正在为很大一部分业务提供资金，因此只需意识到这可能会带来一些风险因素。理想情况下，我们希望看到这一比例降低，因为这将意味着承担风险的债务更少。
总之..。
综上所述，虽然我们对广东冠军亚洲电子有限公司对自己业务的再投资多少有些鼓舞，但我们意识到回报正在缩水。由于该股在过去五年中下跌了13%，投资者对这一趋势的改善可能也不是太乐观。因此，根据本文的分析，我们认为广东冠军亚洲电子有限公司不具备多管齐下的条件。
然而，广东冠军亚洲电子有限公司确实存在一些风险，我们已经发现广东冠军亚洲电子有限公司的3个警告标志你可能会感兴趣的。
虽然广东冠军亚洲电子有限公司的回报并不是最高的，但看看这个。免费资产负债表稳健、股本回报率高的公司名单。
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本文由Simply Wall St.撰写，具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论，我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议，也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意，我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。
