Should We Be Delighted With Shanghai QiFan Cable Co., Ltd's (SHSE:605222) ROE Of 10%?
Should We Be Delighted With Shanghai QiFan Cable Co., Ltd's (SHSE:605222) ROE Of 10%?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. We'll use ROE to examine Shanghai QiFan Cable Co., Ltd (SHSE:605222), by way of a worked example.
尽管一些投资者已经精通财务指标(帽子提示),但本文适合那些想了解股本回报率(ROE)及其重要性的人。我们将使用ROE通过一个实用的例子来检查上海启帆电缆有限公司(SHSE: 605222)。
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
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。简而言之,投资回报率显示了每美元从其股东投资中产生的利润。
See our latest analysis for Shanghai QiFan Cable
查看我们对上海启帆电缆的最新分析
How To Calculate Return On Equity?
如何计算股本回报率?
ROE can be calculated by using the formula:
ROE 可以通过以下公式计算:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股本回报率 = 净利润(来自持续经营业务)÷ 股东权益
So, based on the above formula, the ROE for Shanghai QiFan Cable is:
因此,根据上述公式,上海启帆电缆的投资回报率为:
10% = CN¥467m ÷ CN¥4.6b (Based on the trailing twelve months to September 2023).
10% = 4.67亿元人民币 ¥46亿元人民币(基于截至2023年9月的过去十二个月)。
The 'return' is the profit over the last twelve months. Another way to think of that is that for every CN¥1 worth of equity, the company was able to earn CN¥0.10 in profit.
“回报” 是过去十二个月的利润。另一种思考方式是,每持有价值人民币1元的股权,该公司就能赚取0.10元人民币的利润。
Does Shanghai QiFan Cable Have A Good ROE?
上海启帆电缆的投资回报率好吗?
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As you can see in the graphic below, Shanghai QiFan Cable has a higher ROE than the average (7.2%) in the Electrical industry.
可以说,评估公司投资回报率的最简单方法是将其与行业平均水平进行比较。这种方法的局限性在于,有些公司与其他公司有很大不同,即使属于相同的行业分类也是如此。如下图所示,上海启帆电缆的投资回报率高于电气行业的平均水平(7.2%)。
![roe](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20231108/0-6514b31874052c4d4454ad568894f7e8-0-d977042ce905ceaecb615fa170cb4cdc.png/big)
That's clearly a positive. With that said, a high ROE doesn't always indicate high profitability. Especially when a firm uses high levels of debt to finance its debt which may boost its ROE but the high leverage puts the company at risk. Our risks dashboardshould have the 2 risks we have identified for Shanghai QiFan Cable.
这显然是积极的。话虽如此,高投资回报率并不总是表示盈利能力高。尤其是当一家公司使用高额债务为债务融资时,这可能会提高其投资回报率,但高杠杆率使公司面临风险。我们的风险仪表板应该包含我们为上海启帆电缆确定的两个风险。
How Does Debt Impact Return On Equity?
债务如何影响股本回报率?
Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. That will make the ROE look better than if no debt was used.
几乎所有公司都需要资金来投资该业务,以增加利润。这些现金可以来自发行股票、留存收益或债务。在前两种情况下,投资回报率将捕捉到资本的这种增长用途。在后一种情况下,用于增长的债务将提高回报,但不会影响总净值。这将使投资回报率看起来比不使用债务时更好。
Combining Shanghai QiFan Cable's Debt And Its 10% Return On Equity
结合上海启帆电缆的债务及其10%的股本回报率
It's worth noting the high use of debt by Shanghai QiFan Cable, leading to its debt to equity ratio of 1.38. The combination of a rather low ROE and significant use of debt is not particularly appealing. Investors should think carefully about how a company might perform if it was unable to borrow so easily, because credit markets do change over time.
值得注意的是,上海启帆电缆大量使用债务,使其负债权益比率为1.38。相当低的投资回报率和大量使用债务相结合并不是特别有吸引力。投资者应该仔细考虑如果一家公司无法如此轻易地借款,它会如何表现,因为信贷市场确实会随着时间的推移而变化。
Summary
摘要
Return on equity is one way we can compare its business quality of different companies. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
股本回报率是我们可以比较不同公司的业务质量的一种方式。能够在没有债务的情况下实现高股本回报率的公司可以被视为高质量的企业。如果两家公司的债务与股权比率大致相同,而一家公司的投资回报率更高,那么我通常更喜欢投资回报率更高的那家公司。
But when a business is high quality, the market often bids it up to a price that reflects this. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking this free report on analyst forecasts for the company.
但是,当企业质量很高时,市场通常会以反映这一点的价格对其进行出价。相对于当前价格所反映的利润增长预期,还必须考虑利润可能的增长速度。因此,我认为可能值得查看这份关于分析师对公司的预测的免费报告。
Of course Shanghai QiFan Cable may not be the best stock to buy. So you may wish to see this free collection of other companies that have high ROE and low debt.
当然,上海启帆电缆可能不是最值得买入的股票。因此,您可能希望看到这份免费收藏的其他投资回报率高、债务低的公司。
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Simply Wall St的这篇文章本质上是笼统的。我们仅使用公正的方法根据历史数据和分析师的预测提供评论,我们的文章无意作为财务建议。它不构成买入或卖出任何股票的建议,也没有考虑到您的目标或财务状况。我们的目标是为您提供由基本数据驱动的长期重点分析。请注意,我们的分析可能不考虑最新的价格敏感型公司公告或定性材料。简而言之,华尔街没有持有任何上述股票的头寸。