If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Having said that, from a first glance at Intco Medical Technology (SZSE:300677) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look.
What Is Return On Capital Employed (ROCE)?
For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Intco Medical Technology is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.099 = CN¥1.8b ÷ (CN¥21b - CN¥2.2b) (Based on the trailing twelve months to June 2022).
So, Intco Medical Technology has an ROCE of 9.9%. On its own that's a low return on capital but it's in line with the industry's average returns of 10%.
See our latest analysis for Intco Medical Technology
SZSE:300677 Return on Capital Employed September 16th 2022
Historical performance is a great place to start when researching a stock so above you can see the gauge for Intco Medical Technology's ROCE against it's prior returns. If you're interested in investigating Intco Medical Technology's past further, check out this free graph of past earnings, revenue and cash flow.
What The Trend Of ROCE Can Tell Us
When we looked at the ROCE trend at Intco Medical Technology, we didn't gain much confidence. Over the last five years, returns on capital have decreased to 9.9% from 21% five years ago. And considering revenue has dropped while employing more capital, we'd be cautious. This could mean that the business is losing its competitive advantage or market share, because while more money is being put into ventures, it's actually producing a lower return - "less bang for their buck" per se.
On a related note, Intco Medical Technology has decreased its current liabilities to 10% of total assets. That could partly explain why the ROCE has dropped. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Since the business is basically funding more of its operations with it's own money, you could argue this has made the business less efficient at generating ROCE.
The Key Takeaway
We're a bit apprehensive about Intco Medical Technology because despite more capital being deployed in the business, returns on that capital and sales have both fallen. Yet despite these poor fundamentals, the stock has gained a huge 162% over the last five years, so investors appear very optimistic. In any case, the current underlying trends don't bode well for long term performance so unless they reverse, we'd start looking elsewhere.
If you want to know some of the risks facing Intco Medical Technology we've found 3 warning signs (1 doesn't sit too well with us!) that you should be aware of before investing here.
While Intco Medical Technology may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.
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.
如果你不确定在寻找下一个多袋子时从哪里开始，有几个关键的趋势你应该密切关注。在其他方面，我们希望看到两件事；第一，不断增长的退货一是关于已用资本(ROCE)，二是公司的金额已动用资本的比例。归根结底，这表明它是一家正在以越来越高的回报率对利润进行再投资的企业。话虽如此，从第一眼看Intco医疗技术(SZSE：300677)我们不会因为回报率的趋势而从椅子上跳起来，但让我们更深入地看看。
什么是资本回报率(ROCE)？
对于那些不确定ROCE是什么的人，它衡量的是一家公司可以从其业务中使用的资本产生的税前利润。Intco医疗技术公司的计算公式为：
已动用资本回报率=息税前收益(EBIT)？(总资产-流动负债)
0.099=CN元18亿？(CN元210亿-CN元22亿)(根据截至2022年6月的往绩12个月计算).
所以,Intco Medical Technology的净资产收益率为9.9%。就其本身而言，这是一个较低的资本回报率，但符合该行业10%的平均回报率。
查看我们对Intco医疗技术的最新分析
深圳证交所：2022年9月16日资本回报率300677
当研究一只股票时，历史表现是一个很好的起点，因此在上面你可以看到Intco Medical Technology的ROCE相对于它之前的回报的衡量标准。如果您有兴趣进一步调查Intco医疗技术公司的过去，请查看以下内容免费过去收益、收入和现金流的图表。
ROCE的走势告诉我们什么
当我们观察Intco Medical Technology的ROCE趋势时，我们并没有获得太多信心。过去五年，资本回报率从五年前的21%降至9.9%。考虑到在雇佣更多资本的同时收入有所下降，我们会持谨慎态度。这可能意味着企业正在失去其竞争优势或市场份额，因为虽然更多的资金被投入到风险投资中，但实际上它产生的回报更低--本身就是“更少的回报”。
与此相关的是，Intco医疗技术公司已将目前的负债降至总资产的10%。这可能在一定程度上解释了ROCE下降的原因。实际上，这意味着它们的供应商或短期债权人减少了对业务的融资，这降低了一些风险因素。由于企业基本上是用自有资金为更多的运营提供资金，你可以说这降低了企业产生净资产收益率的效率。
关键的外卖
我们对Intco医疗技术公司有点担心，因为尽管更多的资本被部署到该业务中，但这些资本的回报和销售额都有所下降。然而，尽管基本面不佳，但该股在过去五年中大幅上涨了162%，因此投资者似乎非常乐观。无论如何，目前的潜在趋势对长期表现来说都不是好兆头，所以除非它们逆转，否则我们将开始寻找其他地方。
如果你想知道Intco医疗技术公司面临的一些风险，我们找到了3个警示标志(%1与我们的关系不太好！)在这里投资之前你应该意识到这一点。
尽管Intco医疗技术公司目前的回报率可能不是最高的，但我们已经编制了一份目前股本回报率超过25%的公司名单。看看这个免费在这里列出。
对这篇文章有什么反馈吗？担心内容吗？ 保持联系直接与我们联系。或者，也可以给编辑组发电子邮件，地址是implywallst.com。
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。
