Capital Allocation Trends At Long Yuan Construction Group (SHSE:600491) Aren't Ideal
Capital Allocation Trends At Long Yuan Construction Group (SHSE:600491) Aren't Ideal
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for? Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. This shows us that it's a compounding machine, able to continually reinvest its earnings back into the business and generate higher returns. However, after briefly looking over the numbers, we don't think Long Yuan Construction Group (SHSE:600491) has the makings of a multi-bagger going forward, but let's have a look at why that may be.
如果我们想找到一支可以长期倍增的股票,我们应该寻找哪些潜在的趋势?首先,我们想看到资本雇用回报(ROCE)得到证明并且不断增长,并且其资本雇用基础扩大。这表明它是一个复利机器,能够不断将其盈利再投资到业务中,并且产生更高的回报。然而,经过简短地浏览了数字,我们认为龙元建设(SHSE:600491)未来不具备多倍增长的潜力,但是让我们看看为什么。
Return On Capital Employed (ROCE): What Is It?
资本雇用回报率(ROCE)是什么?
For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Long Yuan Construction Group is:
对于那些不确定ROCE是什么的人,它衡量的是公司可以从其业务所雇用的资本中产生的税前利润的数量。龙元建设集团的这个计算公式是:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
资产雇用回报率(ROCE)是指企业利润,即企业税前利润除以企业投入的总资本(负债加股权)。如果ROCE高于企业财务成本的承受能力,那么企业就会创造出更多的价值。
0.025 = CN¥746m ÷ (CN¥57b - CN¥28b) (Based on the trailing twelve months to March 2024).
0.025 = CN¥74600万 ÷ (CN¥570亿 - CN¥28亿)(基于截至2024年3月的过去12个月)。
Therefore, Long Yuan Construction Group has an ROCE of 2.5%. Ultimately, that's a low return and it under-performs the Construction industry average of 6.5%.
因此,龙元建设集团ROCE为2.5%。最终,这是一个低回报,表现不如施工行业的平均水平6.5%。
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Historical performance is a great place to start when researching a stock so above you can see the gauge for Long Yuan Construction Group's ROCE against it's prior returns. If you want to delve into the historical earnings , check out these free graphs detailing revenue and cash flow performance of Long Yuan Construction Group.
历史表现是研究股票的好起点,因此您可以看到龙元建设集团的ROCE与其以往回报的比较。如果您想深入研究历史收益,请查看这些免费图表,详细介绍龙元建设集团的营业收入和现金流表现。
What The Trend Of ROCE Can Tell Us
尽管如此,当我们看 enphase energy (纳斯达克股票代码:ENPH) 的时候,它似乎并没有完全符合这些要求。
We weren't thrilled with the trend because Long Yuan Construction Group's ROCE has reduced by 61% over the last five years, while the business employed 39% more capital. However, some of the increase in capital employed could be attributed to the recent capital raising that's been completed prior to their latest reporting period, so keep that in mind when looking at the ROCE decrease. Long Yuan Construction Group probably hasn't received a full year of earnings yet from the new funds it raised, so these figures should be taken with a grain of salt.
我们对这个趋势并不满意,因为龙元建设集团的ROCE在过去五年中减少了61%,同时业务的资本雇用增加了39%。然而,业务增加的部分资本雇用可以归因于最新报告期前完成的资本筹集,因此在看到ROCE下降时,请记住这一点。龙元建设集团可能还没有从发行新基金中获得全年收益,因此这些数字应该以适当的怀疑态度看待。
On a related note, Long Yuan Construction Group has decreased its current liabilities to 49% of total assets. So we could link some of this to the decrease in ROCE. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Since the business is basically funding more of its operations with it's own money, you could argue this has made the business less efficient at generating ROCE. Either way, they're still at a pretty high level, so we'd like to see them fall further if possible.
另外,龙元建设集团将其流动负债降低到总资产的49%。因此,我们可以将ROCE的降低与此联系起来,这实质上意味着其供应商或短期债权人为业务提供的资金较少,从而降低了某些风险因素。由于业务基本上使用自己的资金资助其运营,可以说这使得业务在产生ROCE方面不那么高效。无论哪种方式,它们的ROCE仍然处于相当高的水平,因此我们希望看到它们进一步下降(如果可能的话)。
Our Take On Long Yuan Construction Group's ROCE
我们对龙元建设集团的ROCE的看法
From the above analysis, we find it rather worrisome that returns on capital and sales for Long Yuan Construction Group have fallen, meanwhile the business is employing more capital than it was five years ago. It should come as no surprise then that the stock has fallen 57% over the last five years, so it looks like investors are recognizing these changes. Unless there is a shift to a more positive trajectory in these metrics, we would look elsewhere.
从上面的分析中,我们发现龙元建设集团的资本和销售回报率下降,同时业务所使用的资本比五年前增加了。因此,股票在过去五年中下跌了57%,因此投资者认识到了这些变化,这并不令人惊讶。除非这些指标有更积极的趋势转变,否则我们将寻找其他投资机会。
Long Yuan Construction Group does have some risks though, and we've spotted 2 warning signs for Long Yuan Construction Group that you might be interested in.
龙元建设集团确实存在一些风险,我们已经发现了2个关于龙元建设集团的警示信号,您可能会感兴趣。
While Long Yuan Construction Group isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.
虽然龙元建设集团没有获得最高的回报,请查看此免费的公司列表,这些公司在实现坚实资产负债表的同时获得高回报率。
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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.
对本文有任何反馈?对内容有任何疑虑?请直接与我们联系。或者,发送电子邮件至editorial-team@simplywallst.com。
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
对本文有任何反馈?对内容有任何疑虑?请直接与我们联系。或者,发送电子邮件至editorial-team@simplywallst.com。