Solid Earnings May Not Tell The Whole Story For Hang Zhou Radical Energy-Saving Technology (SZSE:300652)
Solid Earnings May Not Tell The Whole Story For Hang Zhou Radical Energy-Saving Technology (SZSE:300652)
Hang Zhou Radical Energy-Saving Technology Co., Ltd.'s (SZSE:300652 ) stock didn't jump after it announced some healthy earnings. We did some digging and believe investors may be worried about some underlying factors in the report.
杭州雷迪克节能技术有限公司(SZSE:300652)的股票在宣布一些健康收益后没有大涨。我们进行了一些调查,认为投资者可能担心报告中一些潜在因素。
Zooming In On Hang Zhou Radical Energy-Saving Technology's Earnings
聚焦杭州雷迪克节能技术的利润
One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. This ratio tells us how much of a company's profit is not backed by free cashflow.
用于衡量公司将其盈利转换成自由现金流(FCF)的一个关键财务比率是应计比率。为了得出应计比率,我们首先从一个期间的利润中减去FCF,然后将该数字除以期间的平均经营资产。这个比率告诉我们公司利润有多少不受自由现金流支持。
That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.
这意味着负的计提比率是一件好事,因为它表明公司带来的自由现金流比其利润所暗示的要多。虽然拥有正的计提比率毫无问题,表明某种程度的非现金利润,但高的计提比率则是一个坏信号,因为这表明纸面利润与现金流不匹配。值得注意的是,有一些学术证据表明,高的计提比率对近期利润总体上是一个坏兆头。
Hang Zhou Radical Energy-Saving Technology has an accrual ratio of 0.20 for the year to September 2024. Therefore, we know that it's free cashflow was significantly lower than its statutory profit, which is hardly a good thing. Over the last year it actually had negative free cash flow of CN¥15m, in contrast to the aforementioned profit of CN¥120.4m. We saw that FCF was CN¥58m a year ago though, so Hang Zhou Radical Energy-Saving Technology has at least been able to generate positive FCF in the past. However, that's not all there is to consider. The accrual ratio is reflecting the impact of unusual items on statutory profit, at least in part.
杭州雷迪克节能技术截至2024年9月的年度应计比率为0.20。因此,我们知道它的自由现金流远低于法定利润,这并不是一件好事。去年实际上出现负的自由现金流为1500万人民币,与上述12040万人民币的利润形成对比。不过,一年前看到自由现金流为5800万人民币,所以杭州雷迪克节能技术至少过去有能力生成正的自由现金流。然而,还有其他需要考虑的因素。应计比率在一定程度上反映了不寻常项目对法定利润的影响。
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Hang Zhou Radical Energy-Saving Technology.
注意:我们始终建议投资者检查资产负债表的实力。单击此处查看我们对杭州雷迪克节能技术的资产负债表分析。
How Do Unusual Items Influence Profit?
非常规项目如何影响利润?
Given the accrual ratio, it's not overly surprising that Hang Zhou Radical Energy-Saving Technology's profit was boosted by unusual items worth CN¥17m in the last twelve months. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. Assuming those unusual items don't show up again in the current year, we'd thus expect profit to be weaker next year (in the absence of business growth, that is).
考虑到应计比率,雷迪克过去十二个月的利润受到价值为1700万人民币的飞凡项目推动,并不是十分令人惊讶。虽然利润增加总是令人高兴,但来自飞凡项目的大额贡献有时会减弱我们的热情。当我们对成千上万家上市公司进行了数据分析后,我们发现某一年份中来自飞凡项目的增值通常不会在下一年重复出现。正如你所期望的那样,鉴于这些增值被描述为“飞凡”,假设这些飞凡项目在当前年份不再出现,我们因此预计利润明年将较弱(在没有业务增长的情况下)。
Our Take On Hang Zhou Radical Energy-Saving Technology's Profit Performance
我们对雷迪克的利润表现的看法
Summing up, Hang Zhou Radical Energy-Saving Technology received a nice boost to profit from unusual items, but could not match its paper profit with free cash flow. For the reasons mentioned above, we think that a perfunctory glance at Hang Zhou Radical Energy-Saving Technology's statutory profits might make it look better than it really is on an underlying level. If you'd like to know more about Hang Zhou Radical Energy-Saving Technology as a business, it's important to be aware of any risks it's facing. Our analysis shows 3 warning signs for Hang Zhou Radical Energy-Saving Technology (1 makes us a bit uncomfortable!) and we strongly recommend you look at them before investing.
总结一下,雷迪克从飞凡项目中获得了利润的良好提升,但无法用自由现金流匹配其名义利润。基于上述原因,我们认为仅仅匆匆一瞥雷迪克的利润报表,可能会让其在基本水平上看起来比实际情况更好。如果您想了解更多关于雷迪克作为一个业务的情况,重要的是要意识到它可能面临的任何风险。我们的分析显示雷迪克能源节能技术存在3个警告信号(其中一个让我们有点不安!),我们强烈建议您在投资之前查看它们。
In this article we've looked at a number of factors that can impair the utility of profit numbers, and we've come away cautious. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
在本文中,我们已经查看了许多影响利润数据实用性的因素,并对此持谨慎态度。但是,还有许多其他方法可以了解公司的情况。例如,许多人认为高股权回报率是企业经济有利的指标,而其他人则喜欢“跟着钱”的思路,并寻找内部人员购买的股票。虽然这可能需要一些您自己的研究,但是您可能会发现这个由高股权回报率的公司组成的免费集合,或者这个拥有重要内部人员持股的股票列表有用。
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