Can Kunshan Huguang Auto Harness Co.,Ltd.'s (SHSE:605333) ROE Continue To Surpass The Industry Average?
Can Kunshan Huguang Auto Harness Co.,Ltd.'s (SHSE:605333) ROE Continue To Surpass The Industry Average?
One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we'll use ROE to better understand Kunshan Huguang Auto Harness Co.,Ltd. (SHSE:605333).
我们最好的投资之一是投资于自己的知识和技能。有了这样的想法，本文将通过ROE来更好地理解业务。为了让本课程更加具有实际意义，我们将使用ROE来更好地了解沪光股份（SHSE:605333）。
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. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
roe或股东权益回报率是评估公司如何有效地从股东那里获得回报的有用工具。简而言之，它用于评估公司相对于其权益资本的盈利能力。
How To Calculate Return On Equity?
如何计算股东权益报酬率？
The formula for return on equity is:
权益回报率的计算公式是：
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
净资产收益率 = 净利润（从持续经营中获得）÷ 股东权益
So, based on the above formula, the ROE for Kunshan Huguang Auto HarnessLtd is:
那么，根据上述公式，沪光股份的ROE为：
11% = CN¥180m ÷ CN¥1.6b (Based on the trailing twelve months to March 2024).
11％=CN¥ 18000万÷CN¥ 16亿（基于截至2024年3月的过去十二个月）。
The 'return' is the profit over the last twelve months. One way to conceptualize this is that for each CN¥1 of shareholders' capital it has, the company made CN¥0.11 in profit.
“回报率”即过去12个月的利润。也就是说，对于每一元股东资本，公司创造了0.11元的利润。
Does Kunshan Huguang Auto HarnessLtd Have A Good Return On Equity?
沪光股份ROE良好吗？
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As is clear from the image below, Kunshan Huguang Auto HarnessLtd has a better ROE than the average (8.2%) in the Auto Components industry.
判断公司是否具有良好的股本回报率的一种简单方法是将其与所处行业的平均水平进行比较。然而，由于同一行业内的公司差异较大，因此这不是一种完美的衡量方法。正如下图所示，沪光股份的ROE超过了汽车元件行业的平均水平（8.2％）。
That is a good sign. Bear in mind, a high ROE doesn't always mean superior financial performance. 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.
这是一个好迹象。请记住，高ROE并不总是意味着出色的财务表现，特别是当公司使用高额的债务来融资其债务时，这可能会提高其ROE，但高杠杆率会将公司置于风险之中。
How Does Debt Impact ROE?
债务对ROE的影响是怎样的？
Most companies need money -- from somewhere -- to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. 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. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
大多数公司都需要资金来增加利润。这种投资的资金可以来自前一年的利润（留存收益），发行新股或借债。在前两种情况下，ROE将捕捉到这种资本的使用以增长。在后一种情况下，用于增长的债务将提高回报率，但不会影响总资产。这样，使用债务将提高ROE，即使业务的核心经济学不变。
Combining Kunshan Huguang Auto HarnessLtd's Debt And Its 11% Return On Equity
结合沪光股份的负债和11％的ROE
It's worth noting the high use of debt by Kunshan Huguang Auto HarnessLtd, leading to its debt to equity ratio of 1.22. 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，沪光股份使用了大量的债务，导致其资产负债比为1.22。即使债务使用了相当多，其ROE仍相当低，这在我们看来并不是一个好结果。债务确实会带来额外的风险，因此只有在公司从中获得了一些不错的回报时才真正值得。
Conclusion
结论
Return on equity is one way we can compare its business quality of different companies. Companies that can achieve high returns on equity without too much debt are generally of good quality. 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.
股东权益回报率是比较不同公司业务质量的方法之一。可以在没有太多债务的情况下实现高股东权益回报率的公司通常质量较好。如果两家公司的负债权益比大约相同，并且一家公司ROE较高，我通常更喜欢ROE较高的公司。
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. 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.
尽管ROE是公司质量的一个有用指标，但您必须查看一系列因素才能确定购买股票的正确价格。还必须考虑利润增长率与当前股票价格反映的利润增长预期相对的速度。因此，我认为值得查看公司分析师预测的免费报告。
But note: Kunshan Huguang Auto HarnessLtd may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
但请注意：沪光股份可能不是最好的股票买入选择。所以来看看这份免费的高ROE、低债务有趣公司的列表吧。
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这篇文章是Simply Wall St的一般性文章。我们根据历史数据和分析师预测提供评论，只使用公正的方法论，我们的文章并不意味着提供任何金融建议。文章不构成买卖任何股票的建议，也不考虑您的目标或您的财务状况。我们的目标是带给您基本数据驱动的长期关注分析。请注意，我们的分析可能不考虑最新的价格敏感公司公告或定性材料。Simply Wall St没有任何股票头寸。
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
对本文有反馈？对内容感到担忧？请直接与我们联系。或者，发送电子邮件至editorial-team@simplywallst.com。