What are the early trends we should look for to identify a stock that could multiply in value over the long term? Ideally, a business will show two trends; firstly a growing return on capital employed (ROCE) and secondly, an increasing amount of capital employed. Put simply, these types of businesses are compounding machines, meaning they are continually reinvesting their earnings at ever-higher rates of return. That's why when we briefly looked at Xinyi Energy Holdings' (HKG:3868) ROCE trend, we were pretty happy with what we saw.
Return On Capital Employed (ROCE): What Is It?
Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. To calculate this metric for Xinyi Energy Holdings, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.11 = HK$1.7b ÷ (HK$21b - HK$5.6b) (Based on the trailing twelve months to June 2022).
So, Xinyi Energy Holdings has an ROCE of 11%. In absolute terms, that's a satisfactory return, but compared to the Renewable Energy industry average of 6.8% it's much better.
See our latest analysis for Xinyi Energy Holdings
SEHK:3868 Return on Capital Employed September 19th 2022
Above you can see how the current ROCE for Xinyi Energy Holdings compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like, you can check out the forecasts from the analysts covering Xinyi Energy Holdings here for free.
The Trend Of ROCE
The trend of ROCE doesn't stand out much, but returns on a whole are decent. The company has consistently earned 11% for the last five years, and the capital employed within the business has risen 107% in that time. 11% is a pretty standard return, and it provides some comfort knowing that Xinyi Energy Holdings has consistently earned this amount. Stable returns in this ballpark can be unexciting, but if they can be maintained over the long run, they often provide nice rewards to shareholders.
Another point to note, we noticed the company has increased current liabilities over the last five years. This is intriguing because if current liabilities hadn't increased to 27% of total assets, this reported ROCE would probably be less than11% because total capital employed would be higher.The 11% ROCE could be even lower if current liabilities weren't 27% of total assets, because the the formula would show a larger base of total capital employed. So while current liabilities isn't high right now, keep an eye out in case it increases further, because this can introduce some elements of risk.
What We Can Learn From Xinyi Energy Holdings' ROCE
In the end, Xinyi Energy Holdings has proven its ability to adequately reinvest capital at good rates of return. And since the stock has risen strongly over the last three years, it appears the market might expect this trend to continue. So while investors seem to be recognizing these promising trends, we still believe the stock deserves further research.
Xinyi Energy Holdings does have some risks, we noticed 2 warning signs (and 1 which is significant) we think you should know about.
While Xinyi Energy Holdings isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets.
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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.
我們應該尋找哪些早期趨勢來識別一隻可能在長期內成倍增值的股票?理想情況下,一家企業將呈現兩種趨勢;第一,增長退貨關於已使用資本(ROCE),第二,增加金額已動用資本的比例。簡而言之,這些類型的企業是複利機器,這意味着它們不斷地以越來越高的回報率對收益進行再投資。這就是為什麼當我們短暫地查看信義能源控股有限公司(HKG:3868)ROCE趨勢,我們對所看到的相當滿意。
資本回報率(ROCE):它是什麼?
如果您不確定,只需澄清一下,ROCE是一種評估公司投資於其業務的資本獲得多少税前收入(按百分比計算)的指標。要計算信義能源控股的這一指標,公式如下:
已動用資本回報率=息税前收益(EBIT)?(總資產-流動負債)
0.11=港幣17億?(港幣210億-56億)(根據截至2022年6月的往績12個月計算).
所以,信義能源控股的淨資產收益率為11%。就絕對值而言,這是一個令人滿意的回報率,但與可再生能源行業6.8%的平均回報率相比,這要好得多。
查看我們對信義能源控股的最新分析
聯交所:3868已動用資本回報率2022年9月19日
上圖中,你可以看到信義能源控股目前的淨資產收益率與之前的資本回報率相比如何,但從過去你只能看出這麼多。如果你願意,你可以查看這裏報道信義能源控股的分析師的預測免費的。
ROCE的發展趨勢
ROCE的趨勢並不是很突出,但總體來説回報是不錯的。該公司在過去五年中持續盈利11%,同期公司內部資本增長了107%。11%是一個相當標準的回報率,知道信義能源控股一直都能賺到這個數字,這讓人感到些許安慰。這樣的穩定回報可能並不令人興奮,但如果它們能夠長期保持下去,它們往往會為股東提供豐厚的回報。
另一點需要注意的是,我們注意到該公司在過去五年中增加了流動負債。這很耐人尋味,因為如果流動負債沒有增加到總資產的27%,這一報告的淨資產收益率可能會低於11%,因為使用的總資本會更高。如果流動負債不是總資產的27%,淨資產收益率可能會更低,因為公式將顯示總使用資本的基數更大。因此,儘管流動負債目前並不高,但要密切注意,以防它進一步增加,因為這可能會帶來一些風險因素。
我們可以從信義能源控股的ROCE中學到什麼
最終,信義能源控股證明瞭自己有能力以良好的回報率進行充分的資本再投資。由於該股在過去三年中強勁上漲,市場似乎預計這一趨勢將繼續下去。因此,儘管投資者似乎認識到了這些充滿希望的趨勢,但我們仍然認為,該股值得進一步研究。
我們注意到,信義能源控股確實存在一些風險2個警告標誌(還有一點很重要)我們認為你應該知道。
儘管信義能源控股並沒有獲得最高的回報,但看看這個免費資產負債表穩健、股本回報率高的公司名單。
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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。