Nanjing Hanrui CobaltLtd's (SZSE:300618) stock up by 6.3% over the past three months. Given its impressive performance, we decided to study the company's key financial indicators as a company's long-term fundamentals usually dictate market outcomes. Specifically, we decided to study Nanjing Hanrui CobaltLtd's ROE in this article.
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. Put another way, it reveals the company's success at turning shareholder investments into profits.
Check out our latest analysis for Nanjing Hanrui CobaltLtd
How Is ROE Calculated?
Return on equity can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Nanjing Hanrui CobaltLtd is:
12% = CN¥612m ÷ CN¥5.1b (Based on the trailing twelve months to June 2022).
The 'return' refers to a company's earnings over the last year. One way to conceptualize this is that for each CN¥1 of shareholders' capital it has, the company made CN¥0.12 in profit.
Why Is ROE Important For Earnings Growth?
So far, we've learned that ROE is a measure of a company's profitability. 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.
Nanjing Hanrui CobaltLtd's Earnings Growth And 12% ROE
To start with, Nanjing Hanrui CobaltLtd's ROE looks acceptable. On comparing with the average industry ROE of 9.5% the company's ROE looks pretty remarkable. This probably laid the ground for Nanjing Hanrui CobaltLtd's moderate 5.0% net income growth seen over the past five years.
Next, on comparing with the industry net income growth, we found that Nanjing Hanrui CobaltLtd's reported growth was lower than the industry growth of 17% in the same period, which is not something we like to see.
SZSE:300618 Past Earnings Growth August 16th 2022
Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. Is Nanjing Hanrui CobaltLtd fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Nanjing Hanrui CobaltLtd Making Efficient Use Of Its Profits?
In Nanjing Hanrui CobaltLtd's case, its respectable earnings growth can probably be explained by its low three-year median payout ratio of 15% (or a retention ratio of 85%), which suggests that the company is investing most of its profits to grow its business.
Moreover, Nanjing Hanrui CobaltLtd is determined to keep sharing its profits with shareholders which we infer from its long history of four years of paying a dividend.
Conclusion
On the whole, we feel that Nanjing Hanrui CobaltLtd's performance has been quite good. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see a good amount of growth in its earnings. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices. Remember, the price of a stock is also dependent on the perceived risk. Therefore investors must keep themselves informed about the risks involved before investing in any company. To know the 2 risks we have identified for Nanjing Hanrui CobaltLtd visit our risks dashboard for free.
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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.
南京漢瑞股份有限公司(SZSE：300618)的股票在過去三個月裏上漲了6.3%。鑑於其令人印象深刻的表現，我們決定研究該公司的關鍵財務指標，因為公司的長期基本面通常決定市場結果。具體地説，我們決定在本文中研究南京漢瑞股份有限公司的淨資產收益率。
淨資產收益率，即股本回報率，是評估一家公司從股東那裏獲得投資回報的有效程度的有用工具。換句話説，它揭示了該公司成功地將股東投資轉化為利潤。
查看我們對南京漢瑞科博特有限公司的最新分析
淨資產收益率是如何計算的？
股本回報率可使用以下公式計算：
股本回報率=(持續經營的)淨利潤？股東權益
因此，根據上述公式，南京漢瑞股份有限公司的淨資產收益率為：
12%=CN元6.12億×CN元51億元(基於截至2022年6月的12個月)。
“回報”指的是一家公司過去一年的收益。將其概念化的一種方法是，公司每持有1元人民幣的股東資本，就會獲得0.12元的利潤。
為什麼淨資產收益率對收益增長很重要？
到目前為止，我們瞭解到淨資產收益率是衡量一家公司盈利能力的指標。我們現在需要評估公司將多少利潤再投資或“保留”用於未來的增長，這就讓我們對公司的增長潛力有了一個瞭解。一般來説，在其他條件相同的情況下，股本回報率和利潤留存較高的公司比不具備這些特徵的公司有更高的增長率。
南京漢瑞科博特有限公司盈利增長和12%的淨資產收益率
首先，南京漢瑞股份有限公司的淨資產收益率看起來可以接受。與9.5%的行業平均淨資產收益率相比，該公司的淨資產收益率看起來相當驚人。這可能為南京漢瑞股份有限公司過去五年實現5.0%的温和淨利潤增長奠定了基礎。
接下來，對比行業淨收入增長，我們發現南京漢瑞股份有限公司的報告增長低於同期行業17%的增長，這是我們不願意看到的。
深圳證交所：過去300618的收益增長2022年8月16日
盈利增長是評估一隻股票時需要考慮的一個重要指標。投資者應該嘗試確定預期的收益增長或下降是否已計入價格，無論是哪種情況。這樣做將有助於他們確定該股的未來看起來是光明的還是不祥的。與其他公司相比，南京漢瑞科博爾特有限公司的價值是否公平？這3個估值指標可能會幫助你做出決定。
南京漢瑞科博特有限公司是否有效利用了利潤？
以南京翰瑞科博特股份有限公司為例，其可觀的收益增長可能可以解釋為其較低的三年中值派息率為15%(或留存率為85%)，這表明該公司正在將大部分利潤用於增長業務。
此外，南京漢瑞股份有限公司決心繼續與股東分享利潤，這是我們從其支付股息的悠久歷史中推斷出來的。
結論
總體來説，我們覺得南京漢瑞公司的業績是相當好的。具體地説，我們喜歡該公司將一大筆利潤以高回報率進行再投資。當然，這導致該公司的收益出現了可觀的增長。如果該公司繼續以目前的方式增長收益，考慮到每股收益對長期股價的影響，這可能會對其股價產生積極影響。記住，股票的價格也取決於感知到的風險。因此，投資者在投資任何公司之前，必須隨時瞭解所涉及的風險。要了解我們為南京漢瑞科技有限公司確定的兩個風險，請免費訪問我們的風險儀錶板。
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本文由Simply Wall St.撰寫，具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論，我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議，也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意，我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。
