With its stock down 15% over the past three months, it is easy to disregard Hisense Home Appliances Group (SZSE:000921). But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals. Specifically, we decided to study Hisense Home Appliances Group's ROE in this article.
Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
View our latest analysis for Hisense Home Appliances Group
How Do You Calculate Return On Equity?
The formula for return on equity is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Hisense Home Appliances Group is:
15% = CN¥2.4b ÷ CN¥16b (Based on the trailing twelve months to June 2022).
The 'return' is the yearly profit. That means that for every CN¥1 worth of shareholders' equity, the company generated CN¥0.15 in profit.
Why Is ROE Important For Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. 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.
Hisense Home Appliances Group's Earnings Growth And 15% ROE
To start with, Hisense Home Appliances Group's ROE looks acceptable. Especially when compared to the industry average of 10% the company's ROE looks pretty impressive. For this reason, Hisense Home Appliances Group's five year net income decline of 8.1% raises the question as to why the high ROE didn't translate into earnings growth. Based on this, we feel that there might be other reasons which haven't been discussed so far in this article that could be hampering the company's growth. Such as, the company pays out a huge portion of its earnings as dividends, or is faced with competitive pressures.
However, when we compared Hisense Home Appliances Group's growth with the industry we found that while the company's earnings have been shrinking, the industry has seen an earnings growth of 12% in the same period. This is quite worrisome.
SZSE:000921 Past Earnings Growth October 20th 2022
Earnings growth is a huge factor in stock valuation. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). 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 Hisense Home Appliances Group is trading on a high P/E or a low P/E, relative to its industry.
Is Hisense Home Appliances Group Making Efficient Use Of Its Profits?
Looking at its three-year median payout ratio of 30% (or a retention ratio of 70%) which is pretty normal, Hisense Home Appliances Group's declining earnings is rather baffling as one would expect to see a fair bit of growth when a company is retaining a good portion of its profits. It looks like there might be some other reasons to explain the lack in that respect. For example, the business could be in decline.
Moreover, Hisense Home Appliances Group has been paying dividends for seven 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 is expected to keep paying out approximately 33% of its profits over the next three years. Therefore, the company's future ROE is also not expected to change by much with analysts predicting an ROE of 14%.
Summary
In total, it does look like Hisense Home Appliances Group has some positive aspects to its business. Yet, the low earnings growth is a bit concerning, especially given that the company has a high rate of return and is reinvesting ma huge portion of its profits. By the looks of it, there could be some other factors, not necessarily in control of the business, that's preventing growth. With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.
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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.
海信家電集團(SZSE：000921)的股價在過去三個月裏下跌了15%，人們很容易忽視它。但如果你密切關注，你可能會發現，該公司的關鍵財務指標看起來相當不錯，這可能意味着，鑑於市場通常會獎勵更具彈性的長期基本面因素，該股可能會在長期內上漲。具體地説，我們決定在本文中研究海信家電集團的ROE。
股本回報率或淨資產收益率是股東要考慮的一個重要因素，因為它告訴他們他們的資本再投資的效率。簡而言之，它是用來評估一家公司相對於其權益資本的盈利能力。
查看我們對海信家電集團的最新分析
你如何計算股本回報率？
這個股本回報率公式是：
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，海信家電集團的ROE為：
15%=24億元×160億元(以截至2022年6月的12個月為基礎)。
“回報”就是年度利潤。這意味着，每增加價值1元的股東權益，公司就會產生0.15元的利潤。
為什麼淨資產收益率對收益增長很重要？
我們已經證實，淨資產收益率是一家公司未來收益的有效盈利指標。根據公司選擇再投資或“保留”多少利潤，我們就能夠評估一家公司未來產生利潤的能力。假設其他條件相同，與沒有相同特徵的公司相比，擁有更高股本回報率和更高利潤保留率的公司通常會有更高的增長率。
海信家電集團盈利增長和15%的淨資產收益率
首先，海信家電集團的淨資產收益率看起來可以接受。特別是與10%的行業平均水平相比，該公司的淨資產收益率看起來相當令人印象深刻。出於這個原因，海信家電集團五年來淨利潤下降8.1%，引發了一個問題：為什麼高淨資產收益率並沒有轉化為收益增長。基於此，我們認為，可能還有本文迄今未討論的其他原因，可能正在阻礙公司的增長。例如，公司將很大一部分收益作為股息支付，或者面臨競爭壓力。
然而，當我們將海信家電集團的增長與行業進行比較時發現，在該公司盈利一直在萎縮的情況下，同期該行業的盈利增長了12%。這相當令人擔憂。
深圳證交所：過去000921的收益增長2022年10月20日
盈利增長是股票估值的一個重要因素。對於投資者來説，重要的是知道市場是否已經消化了公司預期的收益增長(或下降)。這有助於他們確定這隻股票是為光明還是黯淡的未來做準備。衡量預期收益增長的一個很好的指標是市盈率，它根據一隻股票的盈利前景決定市場願意為其支付的價格。因此，你可能想看看海信家電集團的市盈率相對於其行業是高市盈率還是低市盈率。
海信家電集團是否在高效利用利潤？
海信家電集團三年的派息率中值為30%(或留存率為70%)，這很正常，但海信家電集團盈利的下降令人費解，因為當一家公司保留了很大一部分利潤時，人們預計會看到相當大的增長。看起來可能還有其他一些原因來解釋這方面的缺乏。例如，這項業務可能正在衰落。
此外，海信家電集團已經分紅七年，這是一個相當長的時間，這表明管理層一定已經意識到，儘管收益一直在縮水，但股東更喜歡一致的股息。在研究了最新的分析師共識數據後，我們發現，預計該公司將在未來三年繼續支付約33%的利潤。因此，預計該公司未來的淨資產收益率也不會有太大變化，分析師預測淨資產收益率為14%。
摘要
總體而言，海信家電集團的業務確實有一些積極的方面。然而，低收益增長有點令人擔憂，特別是考慮到該公司擁有高回報率，並將大部分利潤進行再投資。從表面上看，可能還有其他一些因素正在阻礙增長，這些因素並不一定是控制企業的因素。話雖如此，我們研究了最新的分析師預測，發現儘管該公司過去的收益有所縮水，但分析師預計其未來的收益將會增長。要了解更多分析師對該公司的最新預測，請查看分析師對該公司預測的可視化。
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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。
