Most readers would already be aware that JH Educational Technology's (HKG:1935) stock increased significantly by 33% over the past week. Since the market usually pay for a company's long-term fundamentals, we decided to study the company's key performance indicators to see if they could be influencing the market. In this article, we decided to focus on JH Educational Technology's ROE.
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 simpler terms, it measures the profitability of a company in relation to shareholder's equity.
Check out our latest analysis for JH Educational Technology
How Is ROE Calculated?
The formula for ROE is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for JH Educational Technology is:
17% = CN¥464m ÷ CN¥2.7b (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 HK$1 worth of equity, the company was able to earn HK$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. 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.
A Side By Side comparison of JH Educational Technology's Earnings Growth And 17% ROE
At first glance, JH Educational Technology seems to have a decent ROE. Especially when compared to the industry average of 10% the company's ROE looks pretty impressive. This certainly adds some context to JH Educational Technology's exceptional 24% net income growth seen over the past five years. We reckon that there could also be other factors at play here. Such as - high earnings retention or an efficient management in place.
Next, on comparing with the industry net income growth, we found that JH Educational Technology's growth is quite high when compared to the industry average growth of 14% in the same period, which is great to see.
SEHK:1935 Past Earnings Growth December 23rd 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. If you're wondering about JH Educational Technology's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.
Is JH Educational Technology Efficiently Re-investing Its Profits?
While the company did pay out a portion of its dividend in the past, it currently doesn't pay a dividend. This is likely what's driving the high earnings growth number discussed above.
Summary
On the whole, we feel that JH Educational Technology's performance has been quite good. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices. Not to forget, share price outcomes are also dependent on the potential risks a company may face. So it is important for investors to be aware of the risks involved in the business. Our risks dashboard will have the 1 risk we have identified for JH Educational Technology.
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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.
大多數讀者應該已經知道,JH教育科技(HKG:1935)的股票在過去一週大幅上漲了33%。由於市場通常為公司的長期基本面買單,我們決定研究公司的關鍵業績指標,看看它們是否會影響市場。在本文中,我們決定將重點放在JH教育科技的淨資產收益率上。
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。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。
查看我們對JH教育技術的最新分析
淨資產收益率是如何計算的?
這個淨資產收益率公式是:
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,JH教育科技的淨資產收益率為:
17%=CN元4.64億×CN元27億元(基於截至2022年6月的12個月)。
“回報”指的是一家公司過去一年的收益。另一種説法是,該公司每持有價值1港元的股票,就能賺取0.17港元的利潤。
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。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。
JH教育科技盈利增長與17%淨資產收益率的並列比較
乍一看,JH教育科技似乎擁有不錯的淨資產收益率。特別是與10%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。這無疑為JH教育科技在過去五年中24%的淨收入增長提供了一些背景。我們認為,可能還有其他因素在起作用。例如-高收益留存或有效的管理到位。
接下來,對比行業淨收入增長,我們發現JH教育科技的增長與同期14%的行業平均增長相比相當高,這是令人欣喜的。
聯交所:1935過去盈利增長2022年12月23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。如果你想知道JH教育科技的估值,看看這個衡量其市盈率的指標,與其行業相比。
JH教育科技是否有效地對其利潤進行了再投資?
雖然該公司過去確實支付了一部分股息,但目前不支付股息。這很可能是推動上述高收益增長數字的原因。
摘要
整體而言,我們覺得JH教育科技的表現相當不錯。特別是,很高興看到該公司在業務上投入了大量資金,並獲得了高回報率,這導致了其收益的可觀增長。如果該公司繼續以目前的方式增長收益,考慮到每股收益對長期股價的影響,這可能會對其股價產生積極影響。別忘了,股價結果還取決於一家公司可能面臨的潛在風險。因此,投資者意識到這項業務所涉及的風險很重要。我們的風險控制面板將包含我們為JH教育技術確定的1個風險。
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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。