Nanjing Hanrui CobaltLtd's (SZSE:300618) stock up by 6.3% over the past three months. Given its impressive performance, we decided to study the company's key financial indicators as a company's long-term fundamentals usually dictate market outcomes. Specifically, we decided to study Nanjing Hanrui CobaltLtd's ROE in this article.
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Put another way, it reveals the company's success at turning shareholder investments into profits.
Check out our latest analysis for Nanjing Hanrui CobaltLtd
How Is ROE Calculated?
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 Nanjing Hanrui CobaltLtd is:
12% = CN¥612m ÷ CN¥5.1b (Based on the trailing twelve months to June 2022).
The 'return' refers to a company's earnings over the last year. One way to conceptualize this is that for each CN¥1 of shareholders' capital it has, the company made CN¥0.12 in profit.
Why Is ROE Important For Earnings Growth?
So far, we've learned that ROE is a measure of a company's profitability. 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. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
Nanjing Hanrui CobaltLtd's Earnings Growth And 12% ROE
To start with, Nanjing Hanrui CobaltLtd's ROE looks acceptable. On comparing with the average industry ROE of 9.5% the company's ROE looks pretty remarkable. This probably laid the ground for Nanjing Hanrui CobaltLtd's moderate 5.0% net income growth seen over the past five years.
Next, on comparing with the industry net income growth, we found that Nanjing Hanrui CobaltLtd's reported growth was lower than the industry growth of 17% in the same period, which is not something we like to see.
SZSE:300618 Past Earnings Growth August 16th 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 Nanjing Hanrui CobaltLtd fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Nanjing Hanrui CobaltLtd Making Efficient Use Of Its Profits?
In Nanjing Hanrui CobaltLtd's case, its respectable earnings growth can probably be explained by its low three-year median payout ratio of 15% (or a retention ratio of 85%), which suggests that the company is investing most of its profits to grow its business.
Moreover, Nanjing Hanrui CobaltLtd is determined to keep sharing its profits with shareholders which we infer from its long history of four years of paying a dividend.
Conclusion
On the whole, we feel that Nanjing Hanrui CobaltLtd's performance has been quite good. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see a good amount of 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. Remember, the price of a stock is also dependent on the perceived risk. Therefore investors must keep themselves informed about the risks involved before investing in any company. To know the 2 risks we have identified for Nanjing Hanrui CobaltLtd visit our risks dashboard for free.
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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.
南京汉瑞股份有限公司(SZSE：300618)的股票在过去三个月里上涨了6.3%。鉴于其令人印象深刻的表现，我们决定研究该公司的关键财务指标，因为公司的长期基本面通常决定市场结果。具体地说，我们决定在本文中研究南京汉瑞股份有限公司的净资产收益率。
净资产收益率，即股本回报率，是评估一家公司从股东那里获得投资回报的有效程度的有用工具。换句话说，它揭示了该公司成功地将股东投资转化为利润。
查看我们对南京汉瑞科博特有限公司的最新分析
净资产收益率是如何计算的？
股本回报率可使用以下公式计算：
股本回报率=(持续经营的)净利润？股东权益
因此，根据上述公式，南京汉瑞股份有限公司的净资产收益率为：
12%=CN元6.12亿×CN元51亿元(基于截至2022年6月的12个月)。
“回报”指的是一家公司过去一年的收益。将其概念化的一种方法是，公司每持有1元人民币的股东资本，就会获得0.12元的利润。
为什么净资产收益率对收益增长很重要？
到目前为止，我们了解到净资产收益率是衡量一家公司盈利能力的指标。我们现在需要评估公司将多少利润再投资或“保留”用于未来的增长，这就让我们对公司的增长潜力有了一个了解。一般来说，在其他条件相同的情况下，股本回报率和利润留存较高的公司比不具备这些特征的公司有更高的增长率。
南京汉瑞科博特有限公司盈利增长和12%的净资产收益率
首先，南京汉瑞股份有限公司的净资产收益率看起来可以接受。与9.5%的行业平均净资产收益率相比，该公司的净资产收益率看起来相当惊人。这可能为南京汉瑞股份有限公司过去五年实现5.0%的温和净利润增长奠定了基础。
接下来，对比行业净收入增长，我们发现南京汉瑞股份有限公司的报告增长低于同期行业17%的增长，这是我们不愿意看到的。
深圳证交所：过去300618的收益增长2022年8月16日
盈利增长是评估一只股票时需要考虑的一个重要指标。投资者应该尝试确定预期的收益增长或下降是否已计入价格，无论是哪种情况。这样做将有助于他们确定该股的未来看起来是光明的还是不祥的。与其他公司相比，南京汉瑞科博尔特有限公司的价值是否公平？这3个估值指标可能会帮助你做出决定。
南京汉瑞科博特有限公司是否有效利用了利润？
以南京翰瑞科博特股份有限公司为例，其可观的收益增长可能可以解释为其较低的三年中值派息率为15%(或留存率为85%)，这表明该公司正在将大部分利润用于增长业务。
此外，南京汉瑞股份有限公司决心继续与股东分享利润，这是我们从其支付股息的悠久历史中推断出来的。
结论
总体来说，我们觉得南京汉瑞公司的业绩是相当好的。具体地说，我们喜欢该公司将一大笔利润以高回报率进行再投资。当然，这导致该公司的收益出现了可观的增长。如果该公司继续以目前的方式增长收益，考虑到每股收益对长期股价的影响，这可能会对其股价产生积极影响。记住，股票的价格也取决于感知到的风险。因此，投资者在投资任何公司之前，必须随时了解所涉及的风险。要了解我们为南京汉瑞科技有限公司确定的两个风险，请免费访问我们的风险仪表板。
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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。
