Should Weakness in Kangmei Pharmaceutical Co., Ltd.'s (SHSE:600518) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?
Should Weakness in Kangmei Pharmaceutical Co., Ltd.'s (SHSE:600518) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?
Kangmei Pharmaceutical (SHSE:600518) has had a rough month with its share price down 8.7%. However, stock prices are usually driven by a company's financials over the long term, which in this case look pretty respectable. In this article, we decided to focus on Kangmei Pharmaceutical's ROE.
ST康美（SHSE：600518）的股价下跌了8.7％，这是一个颇为坎坷的月份。然而，长期来看，股票价格通常受公司的财务状况影响，而在这种情况下，该公司的财务状况相当不错。在本文中，我们决定关注康美药业的ROE。
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
股东权益回报率ROE是测试公司增值能力和管理股东投资的有效性的指标。更简单地说，它衡量公司在股东权益中的盈利能力。
How Is ROE Calculated?
净资产收益率怎么计算？
The formula for ROE is:
roe的公式是：
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 Kangmei Pharmaceutical is:
因此，根据上述公式，康美药业的ROE为：
2.3% = CN¥162m ÷ CN¥7.1b (Based on the trailing twelve months to March 2024).
2.3％= CN¥ 16200万 ÷ CN¥ 71亿（基于截至2024年3月的过去十二个月）。
The 'return' is the income the business earned over the last year. So, this means that for every CN¥1 of its shareholder's investments, the company generates a profit of CN¥0.02.
“回报”是企业过去一年所赚取的收入。这意味着，对于每个股东投资的人民币1元，公司能够创造CN¥0.02的利润。
What Is The Relationship Between ROE And Earnings Growth?
ROE与盈利增长之间的关系是什么？
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
到目前为止，我们已经知道ROE评估了公司利润生成效率。现在我们需要评估公司回报率或“保留”了多少利润以供未来增长，从而可以了解公司的增长潜力。总的来说，其他条件相同的情况下，具有高ROE和利润保留的公司比没有这些属性的公司有更高的增长率。
Kangmei Pharmaceutical's Earnings Growth And 2.3% ROE
康美药业的盈利增长和2.3％的ROE
It is hard to argue that Kangmei Pharmaceutical's ROE is much good in and of itself. Even when compared to the industry average of 7.6%, the ROE figure is pretty disappointing. However, the moderate 19% net income growth seen by Kangmei Pharmaceutical over the past five years is definitely a positive. We reckon that there could be other factors at play here. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.
很难说康美药业的ROE本身很好。即使与行业平均水平7.6％相比，ROE指标也相当令人失望。然而，康美药业过去五年中适度的19％净利润增长无疑是一个积极因素。我们认为这里可能有其他因素。例如，这家公司的管理层可能做出了一些很好的战略决策，或者公司的派息比率很低。
Next, on comparing with the industry net income growth, we found that Kangmei Pharmaceutical's growth is quite high when compared to the industry average growth of 9.2% in the same period, which is great to see.
接下来，与行业净利润增长进行比较，我们发现与同期行业平均增长率9.2％相比，康美药业的增长相当高，这是非常好的。
Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. Is Kangmei Pharmaceutical fairly valued compared to other companies? These 3 valuation measures might help you decide.
盈利增长是影响股票估值的重要因素。投资者应该尝试确定预期的盈利增长或下降（无论哪种情况）是否已定价。然后，这有助于他们确定股票是否具备光明或黯淡的未来。与其他公司相比，康美药业是否公平价值？这3个估值指标可能会帮助您做出决策。
Is Kangmei Pharmaceutical Efficiently Re-investing Its Profits?
康美药业是否有效地重新投资其利润？
Kangmei Pharmaceutical doesn't pay any regular dividends currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the decent earnings growth number that we discussed above.
康美药业目前不支付任何普通股息，这意味着它一直在将所有利润重新投资股票。这无疑有助于上述可观的盈利增长数字。
Conclusion
结论
In total, it does look like Kangmei Pharmaceutical has some positive aspects to its business. Despite its low rate of return, the fact that the company reinvests a very high portion of its profits into its business, no doubt contributed to its high earnings growth. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. Our risks dashboard will have the 1 risk we have identified for Kangmei Pharmaceutical.
总的来说，康美药业的业务具有一些积极的方面。虽然投资回报率较低，但公司将其利润的很高比例再投资到业务中，这无疑有助于其高额盈利增长。虽然我们不会完全忽视该公司，但我们会尝试确定业务的风险程度，以做出更明智的决策。我们的风险仪表板将列出我们为康美药业确定的1个风险。
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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
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。