Wuxi Chemical Equipment Co., Ltd.'s (SZSE:001332) Stock Going Strong But Fundamentals Look Weak: What Implications Could This Have On The Stock?
Wuxi Chemical Equipment Co., Ltd.'s (SZSE:001332) Stock Going Strong But Fundamentals Look Weak: What Implications Could This Have On The Stock?
Most readers would already be aware that Wuxi Chemical Equipment's (SZSE:001332) stock increased significantly by 16% over the past week. However, in this article, we decided to focus on its weak fundamentals, as long-term financial performance of a business is what ultimately dictates market outcomes. Particularly, we will be paying attention to Wuxi Chemical Equipment's ROE today.
大多数读者可能已经知道,无锡化工装备(SZSE:001332)的股票在过去一周大幅上涨了16%。然而,在本文中,我们决定关注其薄弱的基本面,因为长期的财务表现最终决定了市场的结果。特别是,我们将重点关注无锡化工装备的roe。
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 Is ROE Calculated?
净资产收益率怎么计算?
Return on equity can be calculated by using the formula:
股东权益报酬率可以使用以下公式计算:
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 Wuxi Chemical Equipment is:
所以,根据上述公式,无锡化工装备的roe为:
6.7% = CN¥150m ÷ CN¥2.3b (Based on the trailing twelve months to March 2024).
6.7% = 1.5亿人民币 ÷ 23亿元人民币(基于截至2024年3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¥0.07 in profit.
“回报”是年利润。换种方式考虑,对于每1元人民币的股权,公司能够赚取0.07元人民币的利润。
What Has ROE Got To Do With Earnings Growth?
roe与盈利增长有何关系?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. 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.
我们已经确定,roe作为一种有效的盈利预测工具,可为公司未来的盈利能力提供参考。基于公司选择重新投资或“保留”的利润比例,我们可以评估其未来盈利能力。总的来说,在其他条件相等的情况下,roe和利润保留比例高的公司比那些不具备这些特点的公司增长速度更快。
A Side By Side comparison of Wuxi Chemical Equipment's Earnings Growth And 6.7% ROE
无锡化工设备的营收增长与6.7%的ROE的比较
On the face of it, Wuxi Chemical Equipment's ROE is not much to talk about. However, its ROE is similar to the industry average of 7.0%, so we won't completely dismiss the company. But then again, Wuxi Chemical Equipment's five year net income shrunk at a rate of 2.1%. Remember, the company's ROE is a bit low to begin with. Hence, this goes some way in explaining the shrinking earnings.
乍一看,无锡化工设备的ROE并不值得一提。然而,它的ROE与行业平均水平7.0%相似,因此我们不会完全忽视这家公司。但无锡化工设备的五年净利润以2.1%的速率下降。请记住,该公司的ROE起始水平就有点低。因此,这在一定程度上解释了收益的下降。
However, when we compared Wuxi Chemical Equipment's growth with the industry we found that while the company's earnings have been shrinking, the industry has seen an earnings growth of 9.2% in the same period. This is quite worrisome.
然而,当我们将无锡化工设备的增长与行业进行比较时,我们发现,尽管该公司的收益持续下降,但同期行业的收益增长了9.2%,这是相当令人担忧的。
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Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is Wuxi Chemical Equipment fairly valued compared to other companies? These 3 valuation measures might help you decide.
收益增长是股票估值的重要因素。投资者需要判断预期的收益增长是否已经反映在股价中,从而判断股票是朝着明朗的天空前进,还是将要面临沼泽般的困境。与其他公司相比,无锡化工设备是否被合理定价?以下3个估值指标可能会帮助您做出决策。
Is Wuxi Chemical Equipment Efficiently Re-investing Its Profits?
无锡化工设备是否高效地再投资其利润?
Wuxi Chemical Equipment's declining earnings is not surprising given how the company is spending most of its profits in paying dividends, judging by its three-year median payout ratio of 62% (or a retention ratio of 38%). With only a little being reinvested into the business, earnings growth would obviously be low or non-existent. You can see the 2 risks we have identified for Wuxi Chemical Equipment by visiting our risks dashboard for free on our platform here.
无锡化工设备的收益下降并不令人意外,因为公司大部分利润用于支付股息,根据其三年的中位数派息率为62%(或保留比率为38%)来判断。由于只有很少的资金再投资到业务中,因此收益增长显然会很低或不存在。您可以免费访问我们的平台上的风险仪表板,了解我们为无锡化工设备确定的两个风险。
In addition, Wuxi Chemical Equipment only recently started paying a dividend so the management probably decided the shareholders prefer dividends even though earnings have been shrinking.
此外,无锡化工设备最近才开始支付股息,所以管理层可能决定股东更喜欢股息,尽管盈利一直在下降。
Summary
总的来说,我们对伟明环保的表现非常满意。具体而言,我们喜欢公司以高回报率再投资了其利润的很大一部分。当然,这导致公司的收益大幅增长。但是,最新的行业分析师预测表明,该公司的收益预计将加速增长。
Overall, we would be extremely cautious before making any decision on Wuxi Chemical Equipment. As a result of its low ROE and lack of much reinvestment into the business, the company has seen a disappointing earnings growth rate. So far, we've only made a quick discussion around the company's earnings growth. To gain further insights into Wuxi Chemical Equipment's past profit growth, check out this visualization of past earnings, revenue and cash flows.
总的来说,在对无锡化工装备做出任何决定之前,我们应该极度谨慎。由于其ROE较低,且未对业务进行大量再投资,该公司的盈利增长率令人失望。到目前为止,我们只对公司的盈利增长进行了快速讨论。要进一步了解无锡化工装备过去的盈利增长情况,请查看之前的盈利、营业收入和现金流的可视化数据。
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