If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an eye out for. Amongst other things, we'll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company's amount of capital employed. Ultimately, this demonstrates that it's a business that is reinvesting profits at increasing rates of return. Having said that, from a first glance at Intco Medical Technology (SZSE:300677) we aren't jumping out of our chairs at how returns are trending, but let's have a deeper look.
What Is Return On Capital Employed (ROCE)?
For those that aren't sure what ROCE is, it measures the amount of pre-tax profits a company can generate from the capital employed in its business. The formula for this calculation on Intco Medical Technology is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.099 = CN¥1.8b ÷ (CN¥21b - CN¥2.2b) (Based on the trailing twelve months to June 2022).
So, Intco Medical Technology has an ROCE of 9.9%. On its own that's a low return on capital but it's in line with the industry's average returns of 10%.
See our latest analysis for Intco Medical Technology
SZSE:300677 Return on Capital Employed September 16th 2022
Historical performance is a great place to start when researching a stock so above you can see the gauge for Intco Medical Technology's ROCE against it's prior returns. If you're interested in investigating Intco Medical Technology's past further, check out this free graph of past earnings, revenue and cash flow.
What The Trend Of ROCE Can Tell Us
When we looked at the ROCE trend at Intco Medical Technology, we didn't gain much confidence. Over the last five years, returns on capital have decreased to 9.9% from 21% five years ago. And considering revenue has dropped while employing more capital, we'd be cautious. This could mean that the business is losing its competitive advantage or market share, because while more money is being put into ventures, it's actually producing a lower return - "less bang for their buck" per se.
On a related note, Intco Medical Technology has decreased its current liabilities to 10% of total assets. That could partly explain why the ROCE has dropped. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Since the business is basically funding more of its operations with it's own money, you could argue this has made the business less efficient at generating ROCE.
The Key Takeaway
We're a bit apprehensive about Intco Medical Technology because despite more capital being deployed in the business, returns on that capital and sales have both fallen. Yet despite these poor fundamentals, the stock has gained a huge 162% over the last five years, so investors appear very optimistic. In any case, the current underlying trends don't bode well for long term performance so unless they reverse, we'd start looking elsewhere.
If you want to know some of the risks facing Intco Medical Technology we've found 3 warning signs (1 doesn't sit too well with us!) that you should be aware of before investing here.
While Intco Medical Technology may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here.
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.
如果你不確定在尋找下一個多袋子時從哪裏開始，有幾個關鍵的趨勢你應該密切關注。在其他方面，我們希望看到兩件事；第一，不斷增長的退貨一是關於已用資本(ROCE)，二是公司的金額已動用資本的比例。歸根結底，這表明它是一家正在以越來越高的回報率對利潤進行再投資的企業。話雖如此，從第一眼看Intco醫療技術(SZSE：300677)我們不會因為回報率的趨勢而從椅子上跳起來，但讓我們更深入地看看。
什麼是資本回報率(ROCE)？
對於那些不確定ROCE是什麼的人，它衡量的是一家公司可以從其業務中使用的資本產生的税前利潤。Intco醫療技術公司的計算公式為：
已動用資本回報率=息税前收益(EBIT)？(總資產-流動負債)
0.099=CN元18億？(CN元210億-CN元22億)(根據截至2022年6月的往績12個月計算).
所以,Intco Medical Technology的淨資產收益率為9.9%。就其本身而言，這是一個較低的資本回報率，但符合該行業10%的平均回報率。
查看我們對Intco醫療技術的最新分析
深圳證交所：2022年9月16日資本回報率300677
當研究一隻股票時，歷史表現是一個很好的起點，因此在上面你可以看到Intco Medical Technology的ROCE相對於它之前的回報的衡量標準。如果您有興趣進一步調查Intco醫療技術公司的過去，請查看以下內容免費過去收益、收入和現金流的圖表。
ROCE的走勢告訴我們什麼
當我們觀察Intco Medical Technology的ROCE趨勢時，我們並沒有獲得太多信心。過去五年，資本回報率從五年前的21%降至9.9%。考慮到在僱傭更多資本的同時收入有所下降，我們會持謹慎態度。這可能意味着企業正在失去其競爭優勢或市場份額，因為雖然更多的資金被投入到風險投資中，但實際上它產生的回報更低--本身就是“更少的回報”。
與此相關的是，Intco醫療技術公司已將目前的負債降至總資產的10%。這可能在一定程度上解釋了ROCE下降的原因。實際上，這意味着它們的供應商或短期債權人減少了對業務的融資，這降低了一些風險因素。由於企業基本上是用自有資金為更多的運營提供資金，你可以説這降低了企業產生淨資產收益率的效率。
關鍵的外賣
我們對Intco醫療技術公司有點擔心，因為儘管更多的資本被部署到該業務中，但這些資本的回報和銷售額都有所下降。然而，儘管基本面不佳，但該股在過去五年中大幅上漲了162%，因此投資者似乎非常樂觀。無論如何，目前的潛在趨勢對長期表現來説都不是好兆頭，所以除非它們逆轉，否則我們將開始尋找其他地方。
如果你想知道Intco醫療技術公司面臨的一些風險，我們找到了3個警示標誌(%1與我們的關係不太好！)在這裏投資之前你應該意識到這一點。
儘管Intco醫療技術公司目前的回報率可能不是最高的，但我們已經編制了一份目前股本回報率超過25%的公司名單。看看這個免費在這裏列出。
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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。
