Delong Composite Energy Group's (SZSE:000593) stock is up by a considerable 21% over the past month. We wonder if and what role the company's financials play in that price change as a company's long-term fundamentals usually dictate market outcomes. Particularly, we will be paying attention to Delong Composite Energy Group's ROE today.
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 short, ROE shows the profit each dollar generates with respect to its shareholder investments.
See our latest analysis for Delong Composite Energy Group
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 Delong Composite Energy Group is:
4.0% = CN¥46m ÷ CN¥1.1b (Based on the trailing twelve months to September 2022).
The 'return' is the profit over the last twelve months. That means that for every CN¥1 worth of shareholders' equity, the company generated CN¥0.04 in profit.
Why Is ROE Important For Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. 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. 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.
Delong Composite Energy Group's Earnings Growth And 4.0% ROE
As you can see, Delong Composite Energy Group's ROE looks pretty weak. Even when compared to the industry average of 10%, the ROE figure is pretty disappointing. However, we we're pleasantly surprised to see that Delong Composite Energy Group grew its net income at a significant rate of 39% in the last five years. Therefore, there could be other reasons behind this growth. For instance, the company has a low payout ratio or is being managed efficiently.
Next, on comparing with the industry net income growth, we found that Delong Composite Energy Group's growth is quite high when compared to the industry average growth of 12% in the same period, which is great to see.
SZSE:000593 Past Earnings Growth November 30th 2022
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. Is Delong Composite Energy Group fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Delong Composite Energy Group Making Efficient Use Of Its Profits?
Delong Composite Energy Group doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the high earnings growth number that we discussed above.
Conclusion
On the whole, we do feel that Delong Composite Energy Group has some positive attributes. Even in spite of the low rate of return, the company has posted impressive earnings growth as a result of reinvesting heavily into its 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. To know the 1 risk we have identified for Delong Composite Energy Group 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.
德隆综合能源集团(深圳证券交易所股票代码：000593)的股票在过去一个月里大幅上涨了21%。我们想知道，由于一家公司的长期基本面通常决定着市场结果，该公司的财务状况是否以及在价格变化中扮演了什么角色。特别是今天我们将关注德龙综合能源集团的净资产收益率。
股本回报率或净资产收益率是股东要考虑的一个重要因素，因为它告诉他们他们的资本再投资的效率。简而言之，净资产收益率显示了每一美元相对于其股东投资产生的利润。
查看我们对德龙复合能源集团的最新分析
如何计算股本回报率？
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，德龙复合能源集团的净资产收益率为：
4.0%=CN元4600万×CN元11亿元(基于截至2022年9月的12个月)。
“收益”是过去12个月的利润。这意味着，股东权益每增加1元，公司就会产生0.04元的利润。
为什么净资产收益率对收益增长很重要？
我们已经证实，净资产收益率是一家公司未来收益的有效盈利指标。根据公司选择再投资或“保留”多少利润，我们就能够评估一家公司未来产生利润的能力。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。
德隆综合能源集团盈利增长及净资产收益率4.0%
如你所见，德龙综合能源集团的净资产收益率看起来相当疲软。即使与10%的行业平均水平相比，净资产收益率数字也相当令人失望。然而，我们惊喜地看到，德龙综合能源集团在过去五年中净收入以39%的显著速度增长。因此，这种增长背后可能还有其他原因。例如，该公司的派息率较低或管理效率较高。
接下来，对比行业净收入增长，我们发现德龙复合能源集团的增长与同期12%的行业平均增长相比相当高，这是令人欣喜的。
深圳证交所：过去000593的收益增长2022年11月30日
盈利增长是评估一只股票时需要考虑的一个重要指标。投资者下一步需要确定的是，预期的收益增长是否已经计入了股价。通过这样做，他们将知道股票是将进入清澈的蓝色水域，还是等待沼泽水域。与其他公司相比，德龙综合能源集团的估值是否公平？这3个估值指标可能会帮助你做出决定。
德隆综合能源集团是否有效利用了利润？
德隆综合能源集团目前不支付任何股息，这实质上意味着它一直在将所有利润再投资于该业务。这无疑是我们上面讨论的高收益增长数字的原因。
结论
总体来说，我们确实感觉到德龙复能集团有一些积极的属性。尽管回报率很低，但由于对业务进行了大量再投资，该公司实现了令人印象深刻的收益增长。虽然我们不会完全解雇这家公司，但我们要做的是努力确定这项业务在公司周围做出更明智的决定的风险有多大。要了解我们为德隆综合能源集团确定的1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。
