Is Shandong Hi-speed Company Limited's (SHSE:600350) ROE Of 7.3% Impressive?
Is Shandong Hi-speed Company Limited's (SHSE:600350) ROE Of 7.3% Impressive?
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 Shandong Hi-speed Company Limited (SHSE:600350).
我们可以通过投资我们自己的知识和技能来获取最佳回报。因此，本文将介绍如何利用roe更好地了解业务行业板块。为了使课程更加实践，我们将使用roe来更好地了解山东高速公路股份有限公司 (SHSE:600350)。
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
股东权益回报率（roe）是一种关键指标，用于评估公司管理层如何有效利用公司资本。更简单地说，它衡量了公司相对股东权益的盈利能力。
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 Shandong Hi-speed is:
因此，根据上述公式，山东高速的roe为:
7.3% = CN¥4.0b ÷ CN¥56b (Based on the trailing twelve months to March 2024).
7.3% = CN¥40亿 ÷ CN¥560亿 (基于截至2024年3月的过去十二个月)。
The 'return' is the yearly profit. So, this means that for every CN¥1 of its shareholder's investments, the company generates a profit of CN¥0.07.
'回报'是年度利润。因此，这意味着对于每一元股东投资，公司创造的利润为CN¥0.07。
Does Shandong Hi-speed Have A Good ROE?
山东高速的roe如何？
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. You can see in the graphic below that Shandong Hi-speed has an ROE that is fairly close to the average for the Infrastructure industry (6.3%).
可以说，评估公司roe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，即使在同一行业分类中，有些公司也有很大的不同。您可以看到下面的图表，山东高速的roe与制造行业的平均水平(6.3%)相当接近。
That isn't amazing, but it is respectable. Although the ROE is similar to the industry, we should still perform further checks to see if the company's ROE is being boosted by high debt levels. If true, then it is more an indication of risk than the potential. You can see the 2 risks we have identified for Shandong Hi-speed by visiting our risks dashboard for free on our platform here.
这并不是很惊人，但也算是可观的。虽然roe类似于行业平均水平，但我们仍然应该进一步检查公司的roe是否受到高负债水平的提振。如果是真的，那么这更多的是一个风险指标，而不是潜在的利好。您可以在这里免费查看我们平台上为山东高速所识别的2种风险。
The Importance Of Debt To Return On Equity
债务对股本回报率的重要性
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 case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
几乎所有公司都需要资金来投资业务来提高利润。这些资金可能来自发行股份、保留收益或债务。对于前两种选择，ROE将反映出这种用于增长的资金的运用。在后一种情况下，用于增长所需的债务会提高回报，但不会影响股东权益。因此，债务使用可以改善ROE，尽管在像暴风雨一样的时候会伴随额外的风险。
Combining Shandong Hi-speed's Debt And Its 7.3% Return On Equity
结合山东高速的债务和7.3%的roe。
Shandong Hi-speed clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.31. The combination of a rather low ROE and significant use of debt is not particularly appealing. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.
山东高速显然使用大量的债务来提高回报，因为其债务股权比为1.31。较低的roe和大量使用债务的组合并不特别吸引人。债务确实带来了额外的风险，因此只有在公司从中获得了一些不错的回报时，才会真正有价值。
Conclusion
结论
Return on equity is one way we can compare its business quality of different companies. In our books, the highest quality companies have high return on equity, despite low debt. If two companies have the same ROE, then I would generally prefer the one with less debt.
ROE是比较不同公司业务质量的一种方式。在我们看来，高回报率（ROE）的高质量公司，尽管债务较低。如果两家公司的ROE相同，则通常会更喜欢债务较少的那家。
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So I think it may be worth checking this free report on analyst forecasts for the company.
但是，ROE只是更大难题的一部分，因为高质量的企业通常以高倍数的收益进行交易。因此，重要的是要考虑其他因素，例如未来的利润增长以及未来需要多少投资。因此，我认为值得检查有关该公司分析师预测的免费报告。
Of course Shandong Hi-speed 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，山东高速可能不是最佳的买入股票。因此，您可能希望查看这些其他业务的免费收藏，这些业务具有高roe和低债务。
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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