Delong Composite Energy Group's (SZSE:000593) stock is up by a considerable 21% over the past month. We wonder if and what role the company's financials play in that price change as a company's long-term fundamentals usually dictate market outcomes. Particularly, we will be paying attention to Delong Composite Energy Group's ROE today.
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. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
See our latest analysis for Delong Composite Energy Group
How To Calculate Return On Equity?
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 Delong Composite Energy Group is:
4.0% = CN¥46m ÷ CN¥1.1b (Based on the trailing twelve months to September 2022).
The 'return' is the profit over the last twelve months. That means that for every CN¥1 worth of shareholders' equity, the company generated CN¥0.04 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. 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.
Delong Composite Energy Group's Earnings Growth And 4.0% ROE
As you can see, Delong Composite Energy Group's ROE looks pretty weak. Even when compared to the industry average of 10%, the ROE figure is pretty disappointing. However, we we're pleasantly surprised to see that Delong Composite Energy Group grew its net income at a significant rate of 39% in the last five years. Therefore, there could be other reasons behind this growth. For instance, the company has a low payout ratio or is being managed efficiently.
Next, on comparing with the industry net income growth, we found that Delong Composite Energy Group's growth is quite high when compared to the industry average growth of 12% in the same period, which is great to see.
SZSE:000593 Past Earnings Growth November 30th 2022
Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Is Delong Composite Energy Group fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Delong Composite Energy Group Making Efficient Use Of Its Profits?
Delong Composite Energy Group doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the high earnings growth number that we discussed above.
Conclusion
On the whole, we do feel that Delong Composite Energy Group has some positive attributes. Even in spite of the low rate of return, the company has posted impressive earnings growth as a result of reinvesting heavily into its business. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. To know the 1 risk we have identified for Delong Composite Energy Group 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.
德隆綜合能源集團(深圳證券交易所股票代碼：000593)的股票在過去一個月裏大幅上漲了21%。我們想知道，由於一家公司的長期基本面通常決定着市場結果，該公司的財務狀況是否以及在價格變化中扮演了什麼角色。特別是今天我們將關注德龍綜合能源集團的淨資產收益率。
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，淨資產收益率顯示了每一美元相對於其股東投資產生的利潤。
查看我們對德龍複合能源集團的最新分析
如何計算股本回報率？
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，德龍複合能源集團的淨資產收益率為：
4.0%=CN元4600萬×CN元11億元(基於截至2022年9月的12個月)。
“收益”是過去12個月的利潤。這意味着，股東權益每增加1元，公司就會產生0.04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。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。
德隆綜合能源集團盈利增長及淨資產收益率4.0%
如你所見，德龍綜合能源集團的淨資產收益率看起來相當疲軟。即使與10%的行業平均水平相比，淨資產收益率數字也相當令人失望。然而，我們驚喜地看到，德龍綜合能源集團在過去五年中淨收入以39%的顯著速度增長。因此，這種增長背後可能還有其他原因。例如，該公司的派息率較低或管理效率較高。
接下來，對比行業淨收入增長，我們發現德龍複合能源集團的增長與同期12%的行業平均增長相比相當高，這是令人欣喜的。
深圳證交所：過去000593的收益增長2022年11月30日
盈利增長是評估一隻股票時需要考慮的一個重要指標。投資者下一步需要確定的是，預期的收益增長是否已經計入了股價。通過這樣做，他們將知道股票是將進入清澈的藍色水域，還是等待沼澤水域。與其他公司相比，德龍綜合能源集團的估值是否公平？這3個估值指標可能會幫助你做出決定。
德隆綜合能源集團是否有效利用了利潤？
德隆綜合能源集團目前不支付任何股息，這實質上意味着它一直在將所有利潤再投資於該業務。這無疑是我們上面討論的高收益增長數字的原因。
結論
總體來説，我們確實感覺到德龍復能集團有一些積極的屬性。儘管回報率很低，但由於對業務進行了大量再投資，該公司實現了令人印象深刻的收益增長。雖然我們不會完全解僱這家公司，但我們要做的是努力確定這項業務在公司周圍做出更明智的決定的風險有多大。要了解我們為德隆綜合能源集團確定的1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。
