Does China East Education Holdings Limited's (HKG:667) Weak Fundamentals Mean That The Market Could Correct Its Share Price?
Does China East Education Holdings Limited's (HKG:667) Weak Fundamentals Mean That The Market Could Correct Its Share Price?
China East Education Holdings' (HKG:667) stock is up by a considerable 15% over the past three months. 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 China East Education Holdings' ROE today.
中国东方教育控股(HKG:667)的股票在过去三个月上涨了15%。然而,在这篇文章中,我们决定关注其薄弱的基本面,因为企业的长期财务表现最终决定市场结果。特别是,今天我们将关注中国东方教育控股的ROE。
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
ROE,即净资产收益率,是评估公司如何有效地利用股东所投入的资金以产生回报的有用工具。简单来说,它衡量了公司相对于股东权益的盈利能力。
How To Calculate Return On Equity?
如何计算股东权益回报率?
Return on equity can be calculated by using the formula:
净资产收益率可以通过以下公式计算:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股东权益回报率 = 净利润(来自持续运营)÷ 股东权益
So, based on the above formula, the ROE for China East Education Holdings is:
因此,根据上述公式,中国东方教育控股的ROE为:
6.2% = CN¥340m ÷ CN¥5.5b (Based on the trailing twelve months to June 2024).
6.2% = CN¥34000万 ÷ CN¥55亿(基于至2024年6月的过去十二个月)。
The 'return' is the profit over the last twelve months. Another way to think of that is that for every HK$1 worth of equity, the company was able to earn HK$0.06 in profit.
'回报'是过去十二个月的利润。 另一种理解方式是,对于每HK$1的股本,公司能够赚取HK$0.06的利润。
What Has ROE Got To Do With Earnings Growth?
roe与盈利增长有何关系?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.
到目前为止,我们了解到ROE衡量的是公司产生利润的效率。根据公司再投资或"保留"这些利润的多少,以及它的有效性,我们能够评估公司的收益增长潜力。在其他条件相同的情况下,既有较高的权益回报率又有较高利润保留的公司通常比没有这些特征的公司拥有更高的增长率。
A Side By Side comparison of China East Education Holdings' Earnings Growth And 6.2% ROE
中国东方教育控股公司的盈利增长与6.2% ROE的并列比较
When you first look at it, China East Education Holdings' ROE doesn't look that attractive. We then compared the company's ROE to the broader industry and were disappointed to see that the ROE is lower than the industry average of 12%. For this reason, China East Education Holdings' five year net income decline of 21% is not surprising given its lower ROE. However, there could also be other factors causing the earnings to decline. For example, it is possible that the business has allocated capital poorly or that the company has a very high payout ratio.
初看之下,中国东方教育控股公司的ROE似乎并不吸引人。我们将公司的ROE与更广泛的行业进行比较,令我们失望的是,ROE低于行业平均水平的12%。 因此,考虑到其较低的ROE,中国东方教育控股公司五年来净利润下降21%并不令人意外。但是,盈利下降也可能是受到其他因素的影响。例如,业务可能在资本配置上不当,或者公司有非常高的分红派息比例。
That being said, we compared China East Education Holdings' performance with the industry and were concerned when we found that while the company has shrunk its earnings, the industry has grown its earnings at a rate of 6.8% in the same 5-year period.
话虽如此,我们将中国东方教育控股公司的表现与行业进行了比较,当我们发现公司虽然缩减了盈利,但行业在同一5年期内的盈利增长率为6.8%时,感到担忧。

The basis for attaching value to a company is, to a great extent, tied to its earnings growth. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if China East Education Holdings is trading on a high P/E or a low P/E, relative to its industry.
对公司估值的基础在很大程度上与其收益增长相关。投资者接下来需要判断预期的收益增长或缺乏收益增长是否已经反映在股票价格中。这有助于他们判断股票的未来是光明还是黯淡。一个良好的预期收益增长指标是市盈率(P/E),它决定了市场愿意为股票支付的价格,基于其收益前景。因此,您可能想查看中国东部教育控股相对于其行业是高市盈率还是低市盈率。
Is China East Education Holdings Using Its Retained Earnings Effectively?
中国东部教育控股是否有效利用其留存收益?
China East Education Holdings' very high three-year median payout ratio of 128% over the last three years suggests that the company is paying its shareholders more than what it is earning and this explains the company's shrinking earnings. Paying a dividend beyond their means is usually not viable over the long term.
中国东部教育控股在过去三年中非常高的三年中位数分红比例为128%,这表明该公司支付给股东的金额超过其收益,这也解释了公司收益的萎缩。超过其能力支付分红从长远来看通常不可行。
Moreover, China East Education Holdings has been paying dividends for five years, which is a considerable amount of time, suggesting that management must have perceived that the shareholders prefer consistent dividends even though earnings have been shrinking. Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to drop to 81% over the next three years. The fact that the company's ROE is expected to rise to 9.5% over the same period is explained by the drop in the payout ratio.
此外,中国东部教育控股已经支付了五年的分红,这段时间相当长,表明管理层必须感知到股东偏好持续的分红,尽管收益在萎缩。通过研究最新的分析师共识数据,我们发现该公司的未来分红比例预计将在未来三年内降至81%。公司ROE在同一时期预计将上升至9.5%,这一情况可以通过分红比例的下降来解释。
Conclusion
结论
On the whole, China East Education Holdings' performance is quite a big let-down. Particularly, its ROE is a huge disappointment, not to mention its lack of proper reinvestment into the business. As a result its earnings growth has also been quite disappointing. Having said that, looking at current analyst estimates, we found that the company's earnings growth rate is expected to see a huge improvement. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.
总体而言,中国东教育控股的表现让人失望。特别是,其ROE令人非常失望,更不用说其对业务缺乏适当的再投资。因此,其盈利增长也令人相当失望。话虽如此,看看目前分析师的估计,我们发现公司的盈利增长率预计将有很大改善。要了解关于公司的最新分析师预测,请查看此公司分析师预测的可视化。
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
对本文有反馈?对内容有疑虑?请直接与我们联系。或者,发送电子邮件至 editorial-team (at) simplywallst.com。
这篇来自Simply Wall St的文章是一般性的。我们根据历史数据和分析师预测提供评论,采用无偏见的方法,我们的文章并不旨在提供财务建议。它不构成对任何股票的买入或卖出建议,也未考虑到您的目标或财务状况。我们旨在为您提供以基本数据驱动的长期分析。请注意,我们的分析可能未考虑最新的价格敏感公司公告或定性材料。Simply Wall St在提到的任何股票中均没有持仓。