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Are China Railway Materials Company Limited's (SZSE:000927) Fundamentals Good Enough to Warrant Buying Given The Stock's Recent Weakness?

Are China Railway Materials Company Limited's (SZSE:000927) Fundamentals Good Enough to Warrant Buying Given The Stock's Recent Weakness?

鉴于该股近期疲软,中国铁路物资股份有限公司(深圳证券交易所代码:000927)的基本面是否足够好,值得买入?
Simply Wall St ·  2023/07/03 18:04

It is hard to get excited after looking at China Railway Materials' (SZSE:000927) recent performance, when its stock has declined 7.6% over the past three months. However, stock prices are usually driven by a company's financials over the long term, which in this case look pretty respectable. Particularly, we will be paying attention to China Railway Materials' ROE today.

看看中铁物资(SZSE: 000927)最近的表现,很难感到兴奋,当时其股票在过去三个月中下跌了7.6%。但是,从长远来看,股票价格通常由公司的财务状况驱动,在这种情况下,财务状况看起来相当可观。特别是,我们今天将关注中铁物资的投资回报率。

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.

股本回报率或投资回报率是股东需要考虑的重要因素,因为它可以告诉他们资本再投资的有效性。简而言之,它衡量公司相对于股东权益的盈利能力。

View our latest analysis for China Railway Materials

查看我们对中国铁路物资的最新分析

How Is ROE Calculated?

投资回报率是如何计算的?

Return on equity can be calculated by using the formula:

股本回报率可以通过使用以下公式计算:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

股本回报率 = 净利润(来自持续经营)≥ 股东权益

So, based on the above formula, the ROE for China Railway Materials is:

因此,根据上述公式,中铁物资的投资回报率为:

7.4% = CN¥716m ÷ CN¥9.7b (Based on the trailing twelve months to March 2023).

7.4% = 7.16亿人民币 ⇒ 9.7亿人民币(基于截至2023年3月的过去十二个月)。

The 'return' is the amount earned after tax over the last twelve months. So, this means that for every CN¥1 of its shareholder's investments, the company generates a profit of CN¥0.07.

“回报” 是过去十二个月的税后收入。因此,这意味着其股东每投资1元人民币,公司就会产生0.07CN的利润。

Why Is ROE Important For Earnings Growth?

为什么投资回报率对收益增长很重要?

So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. 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.

到目前为止,我们已经了解到,投资回报率是衡量公司盈利能力的指标。根据公司选择将多少利润进行再投资或 “保留”,我们便能够评估公司未来创造利润的能力。假设其他条件都一样,与功能不相同的公司相比,具有更高股本回报率和更高利润保留率的公司通常具有更高的增长率。

China Railway Materials' Earnings Growth And 7.4% ROE

中铁物资的收益增长和7.4%的投资回报率

When you first look at it, China Railway Materials' ROE doesn't look that attractive. However, the fact that the its ROE is quite higher to the industry average of 5.4% doesn't go unnoticed by us. But then again, seeing that China Railway Materials' net income shrunk at a rate of 13% in the past five years, makes us think again. Bear in mind, the company does have a slightly low ROE. It is just that the industry ROE is lower. So that could be one of the factors that are causing earnings growth to shrink.

当你第一次看的时候,中铁物资的投资回报率看起来并不那么吸引人。但是,其投资回报率远高于行业平均水平的5.4%,这一事实并没有被我们忽视。但话又说回来,看到中铁物资的净收入在过去五年中以13%的速度萎缩,这让我们重新思考。请记住,该公司的投资回报率确实略低。只是行业投资回报率较低。因此,这可能是导致收益增长萎缩的因素之一。

So, as a next step, we compared China Railway Materials' performance against the industry and were disappointed to discover that while the company has been shrinking its earnings, the industry has been growing its earnings at a rate of 4.1% over the last few years.

因此,下一步,我们将中铁物资的表现与该行业进行了比较,但失望地发现,尽管该公司一直在缩减收益,但该行业的收益在过去几年中一直以4.1%的速度增长。

past-earnings-growth
SZSE:000927 Past Earnings Growth July 3rd 2023
深圳证券交易所:000927 过去的收益增长 2023 年 7 月 3 日

Earnings growth is an important metric to consider when valuing a stock. 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 China Railway Materials is trading on a high P/E or a low P/E, relative to its industry.

收益增长是估值股票时需要考虑的重要指标。投资者接下来需要确定的是,预期的收益增长或缺乏收益增长是否已经包含在股价中。通过这样做,他们将知道股票是否会进入清澈的蓝色海水,或者是否有沼泽的水域在等待。预期收益增长的一个很好的指标是市盈率,它决定了市场根据股票的收益前景愿意为股票支付的价格。因此,你可能需要检查一下中铁物资相对于其行业的市盈率高还是低市盈率。

Is China Railway Materials Making Efficient Use Of Its Profits?

中国铁路物资是否正在有效利用其利润?

China Railway Materials doesn't pay any dividend, meaning that potentially all of its profits are being reinvested in the business, which doesn't explain why the company's earnings have shrunk if it is retaining all of its profits. It looks like there might be some other reasons to explain the lack in that respect. For example, the business could be in decline.

中铁物资不支付任何股息,这意味着其所有利润可能都被再投资于该业务,这并不能解释如果保留所有利润,为什么该公司的收益会萎缩。看来可能还有其他一些原因可以解释这方面的不足。例如,业务可能处于衰退状态。

Conclusion

结论

On the whole, we do feel that China Railway Materials has some positive attributes. Although, we are disappointed to see a lack of growth in earnings even in spite of a moderate ROE and and a high reinvestment rate. We believe that there might be some outside factors that could be having a negative impact on the business. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. Our risks dashboard will have the 1 risk we have identified for China Railway Materials.

总的来说,我们确实认为中铁物资有一些积极的属性。但是,我们失望地看到,尽管投资回报率适中,再投资率很高,但收益仍缺乏增长。我们认为,可能有一些外部因素可能会对业务产生负面影响。虽然我们不会完全解雇该公司,但我们要做的是努力确定围绕公司做出更明智的决定的业务风险有多大。我们的风险仪表板将具有我们为中国铁路物资确定的1种风险。

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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.

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Simply Wall St 的这篇文章本质上是一般性的。 我们仅使用公正的方法提供基于历史数据和分析师预测的评论,我们的文章无意提供财务建议。 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。

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