Should We Be Cautious About Taiyuan Heavy Industry Co., Ltd.'s (SHSE:600169) ROE Of 2.5%?
Should We Be Cautious About Taiyuan Heavy Industry Co., Ltd.'s (SHSE:600169) ROE Of 2.5%?
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). We'll use ROE to examine Taiyuan Heavy Industry Co., Ltd. (SHSE:600169), by way of a worked example.
许多投资者仍在学习分析股票时可能有用的各种指标。本文适用于那些想了解股本回报率(ROE)的人。我们将以投资回报率来考察太原重工股份有限公司(SHSE: 600169),举一个有效的例子。
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
股本回报率或投资回报率是用于评估公司管理层利用公司资本效率的关键指标。简而言之,它用于评估公司相对于其股权资本的盈利能力。
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 Taiyuan Heavy Industry is:
因此,根据上述公式,太原重工的投资回报率为:
2.5% = CN¥164m ÷ CN¥6.5b (Based on the trailing twelve months to December 2023).
2.5% = 1.64亿元人民币 ÷ 65亿元人民币(基于截至2023年12月的过去十二个月)。
The 'return' is the yearly profit. Another way to think of that is that for every CN¥1 worth of equity, the company was able to earn CN¥0.03 in profit.
“回报” 是每年的利润。另一种思考方式是,每持有价值1元人民币的股权,该公司就能获得0.03元人民币的利润。
Does Taiyuan Heavy Industry Have A Good Return On Equity?
太原重工有良好的股本回报率吗?
Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. If you look at the image below, you can see Taiyuan Heavy Industry has a lower ROE than the average (7.4%) in the Machinery industry classification.
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。重要的是,这远非一个完美的衡量标准,因为各公司在相同的行业分类中差异很大。如果你看下图,你可以看到太原重工的投资回报率低于机械行业分类中的平均水平(7.4%)。
![roe](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240425/0-baf558097fefd96cdac264d5894e1f2b-0-21575c3b2411b3da8968cedfacbaf3d1.png/big)
That's not what we like to see. Although, we think that a lower ROE could still mean that a company has the opportunity to better its returns with the use of leverage, provided its existing debt levels are low. A high debt company having a low ROE is a different story altogether and a risky investment in our books.
这不是我们喜欢看到的。但是,我们认为,只要现有债务水平较低,较低的投资回报率仍可能意味着公司有机会通过使用杠杆提高回报。投资回报率低的高负债公司完全是另一回事,对我们的账面来说也是一项风险投资。
How Does Debt Impact ROE?
债务如何影响投资回报率?
Companies usually need to invest money to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
公司通常需要投资资金来增加利润。这笔现金可以来自留存收益、发行新股(股权)或债务。在第一和第二种情况下,投资回报率将反映这种使用现金投资业务的情况。在后一种情况下,使用债务将提高收益,但不会改变权益。因此,使用债务可以提高投资回报率,尽管可以比喻地说,暴风雨天气会带来额外的风险。
Taiyuan Heavy Industry's Debt And Its 2.5% ROE
太原重工的债务及其2.5%的投资回报率
It's worth noting the high use of debt by Taiyuan Heavy Industry, leading to its debt to equity ratio of 2.29. Its ROE is quite low, even with the use of significant debt; that's not a good result, in our opinion. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.
值得注意的是,太原重工大量使用债务,导致其负债权益比率为2.29。即使使用了巨额债务,其投资回报率也相当低;在我们看来,这不是一个好结果。债务确实会带来额外的风险,因此只有当公司从中获得可观的回报时,债务才是真正值得的。
Conclusion
结论
Return on equity is useful for comparing the quality of different businesses. In our books, the highest quality companies have high return on equity, despite low debt. 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.
股本回报率对于比较不同业务的质量很有用。在我们的账簿中,尽管债务很低,但质量最高的公司的股本回报率却很高。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. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. Check the past profit growth by Taiyuan Heavy Industry by looking at this visualization of past earnings, revenue and cash flow.
但是,当企业质量很高时,市场通常会以反映这一点的价格出价。利润增长率与股票价格所反映的预期相比,是一个特别重要的考虑因素。通过查看过去收益、收入和现金流的可视化,查看太原重工过去的利润增长情况。
Of course Taiyuan Heavy Industry 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,太原重工可能不是最好的买入股票。因此,您不妨免费查看其他投资回报率高、负债率低的公司的名单。
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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。