With its stock down 45% over the past three months, it is easy to disregard China Hanking Holdings (HKG:3788). However, stock prices are usually driven by a company's financial performance over the long term, which in this case looks quite promising. Particularly, we will be paying attention to China Hanking Holdings' ROE today.
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. Put another way, it reveals the company's success at turning shareholder investments into profits.
View our latest analysis for China Hanking Holdings
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 China Hanking Holdings is:
42% = CN¥659m ÷ CN¥1.6b (Based on the trailing twelve months to December 2021).
The 'return' refers to a company's earnings over the last year. That means that for every HK$1 worth of shareholders' equity, the company generated HK$0.42 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 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.
China Hanking Holdings' Earnings Growth And 42% ROE
Firstly, we acknowledge that China Hanking Holdings has a significantly high ROE. Second, a comparison with the average ROE reported by the industry of 12% also doesn't go unnoticed by us. As a result, China Hanking Holdings' exceptional 40% net income growth seen over the past five years, doesn't come as a surprise.
Next, on comparing with the industry net income growth, we found that China Hanking Holdings' growth is quite high when compared to the industry average growth of 24% in the same period, which is great to see.
SEHK:3788 Past Earnings Growth August 2nd 2022
Earnings growth is a huge factor in stock valuation. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). Doing so will help them establish if the stock's future looks promising or ominous. Is China Hanking Holdings fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is China Hanking Holdings Using Its Retained Earnings Effectively?
China Hanking Holdings' three-year median payout ratio is a pretty moderate 42%, meaning the company retains 58% of its income. This suggests that its dividend is well covered, and given the high growth we discussed above, it looks like China Hanking Holdings is reinvesting its earnings efficiently.
Moreover, China Hanking Holdings is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years.
Summary
On the whole, we feel that China Hanking Holdings' performance has been quite good. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. 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. To know the 1 risk we have identified for China Hanking Holdings visit our risks dashboard for free.
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.
由于其股票在过去三个月中下跌了45%,人们很容易忽视中国汉王控股(HKG: 3788)。但是,从长远来看,股票价格通常是由公司的财务表现推动的,在这种情况下,这看起来很有希望。特别是,我们今天将关注中国汉金控股的投资回报率。
股本回报率或投资回报率是对公司增值和管理投资者资金的有效性的考验。换句话说,它揭示了公司成功地将股东投资转化为利润。
查看我们对中国汉王控股的最新分析
如何计算股本回报率?
股本回报率可以通过使用以下公式计算:
股本回报率 = 净利润(来自持续经营)≥ 股东权益
因此,根据上述公式,中国汉王控股的投资回报率为:
42% = cn¥6.59m ≥ cn¥16b(基于截至2021年12月的过去十二个月)。
“回报” 是指公司去年的收益。这意味着,每持有价值1港元的股东权益,公司就会产生0.42港元的利润。
为什么投资回报率对收益增长很重要?
到目前为止,我们已经了解到,投资回报率衡量的是公司创造利润的效率。现在,我们需要评估公司再投资或 “保留” 了多少利润以用于未来的增长,从而使我们对公司的增长潜力有所了解。假设其他一切保持不变,那么与不一定具有这些特征的公司相比,投资回报率和利润保留率越高,公司的增长率就越高。
中国汉王控股的收益增长和42%的投资回报率
首先,我们承认中国汉王控股的投资回报率非常高。其次,与该行业报告的平均投资回报率12%的比较也不会被我们忽视。因此,中国汉王控股在过去五年中实现了40%的惊人净收入增长并不奇怪。
接下来,与行业净收入增长进行比较,我们发现中国汉王控股的增长与同期24%的行业平均增长率相比相当高,这很好看到。
SEHK: 3788 过去的收益增长 2022 年 8 月 2 日
收益增长是股票估值的重要因素。对于投资者来说,重要的是要知道市场是否对公司的预期收益增长(或下降)进行了定价。这样做将帮助他们确定股票的未来是看好还是不祥的。与其他公司相比,中国汉王控股的估值是否公平?这三种估值指标可能会帮助您做出决定。
中国汉王控股是否有效使用了其留存收益?
中国汉王控股的三年平均派息率为相当温和的42%,这意味着该公司保留了其收入的58%。这表明其股息已得到充分保障,鉴于我们上面讨论的高增长,看来中国汉王控股正在有效地对其收益进行再投资。
此外,中国汉王控股决心继续与股东分享利润,这是我们从其支付股息至少十年的悠久历史中推断出来的。
摘要
总体而言,我们觉得中国汉王控股的表现相当不错。特别是,我们喜欢该公司以很高的回报率对其业务进行大量再投资。不出所料,这带来了可观的收益增长。考虑到每股收益如何影响长期股价,如果该公司继续以现在的方式增长收益,那可能会对其股价产生积极影响。别忘了,股价结果还取决于公司可能面临的潜在风险。因此,对于投资者来说,重要的是要意识到业务所涉及的风险。要了解我们为中国汉王控股确定的1种风险,请免费访问我们的风险控制面板。
对这篇文章有反馈吗?对内容感到担忧? 取得联系 直接和我们联系。 或者,给编辑团队 (at) simplywallst.com 发送电子邮件。
Simply Wall St 的这篇文章本质上是一般性的。 我们仅使用不偏不倚的方法根据历史数据和分析师预测提供评论,我们的文章并非旨在提供财务建议。 它不构成买入或卖出任何股票的建议,也没有考虑您的目标或财务状况。我们的目标是为您提供由基本面数据驱动的长期重点分析。请注意,我们的分析可能未将最新的价格敏感型公司公告或定性材料考虑在内。简而言之,华尔街对上述任何股票都没有头寸。