To find a multi-bagger stock, what are the underlying trends we should look for in a business? One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. Speaking of which, we noticed some great changes in Shanghai Zhongyida's (SHSE:900906) returns on capital, so let's have a look.
What Is Return On Capital Employed (ROCE)?
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 Shanghai Zhongyida, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.11 = CN¥105m ÷ (CN¥1.2b - CN¥246m) (Based on the trailing twelve months to September 2022).
Thus, Shanghai Zhongyida has an ROCE of 11%. In absolute terms, that's a satisfactory return, but compared to the Machinery industry average of 6.6% it's much better.
See our latest analysis for Shanghai Zhongyida
![roce](https://usnewsfile.futunn.com/pic/0-17738423-0-d61f6db6c72ae9d9889a457b714ff24a.png/big)
SHSE:900906 Return on Capital Employed December 14th 2022
While the past is not representative of the future, it can be helpful to know how a company has performed historically, which is why we have this chart above. If you'd like to look at how Shanghai Zhongyida has performed in the past in other metrics, you can view this free graph of past earnings, revenue and cash flow.
The Trend Of ROCE
We're pretty happy with how the ROCE has been trending at Shanghai Zhongyida. We found that the returns on capital employed over the last five years have risen by 77%. That's not bad because this tells for every dollar invested (capital employed), the company is increasing the amount earned from that dollar. In regards to capital employed, Shanghai Zhongyida appears to been achieving more with less, since the business is using 31% less capital to run its operation. If this trend continues, the business might be getting more efficient but it's shrinking in terms of total assets.
One more thing to note, Shanghai Zhongyida has decreased current liabilities to 21% of total assets over this period, which effectively reduces the amount of funding from suppliers or short-term creditors. This tells us that Shanghai Zhongyida has grown its returns without a reliance on increasing their current liabilities, which we're very happy with.
Our Take On Shanghai Zhongyida's ROCE
In a nutshell, we're pleased to see that Shanghai Zhongyida has been able to generate higher returns from less capital. Since the stock has returned a solid 41% to shareholders over the last five years, it's fair to say investors are beginning to recognize these changes. In light of that, we think it's worth looking further into this stock because if Shanghai Zhongyida can keep these trends up, it could have a bright future ahead.
If you'd like to know more about Shanghai Zhongyida, we've spotted 3 warning signs, and 1 of them doesn't sit too well with us.
If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity.
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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.
要找到一隻多袋股票,我們應該在一家企業中尋找什麼潛在趨勢?一種常見的方法是嘗試找到一家擁有退貨已使用資本(ROCE)正在增加,同時也在增長金額已動用資本的比例。如果你看到這個,通常意味著它是一家擁有出色商業模式和大量有利可圖的再投資機會的公司。說到這裡,我們注意到了一些很大的變化上海中怡達(上海證券交易所:900906)資本回報率,讓我們來看看。
什麼是資本回報率(ROCE)?
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稅前收入(按百分比計算)的指標。要計算上海中怡達的這一指標,公式如下:
已動用資本回報率=息稅前收益(EBIT)?(總資產-流動負債)
0.11=CN元1.05億?(CN元12億-CN元2.46億)(基於截至2022年9月的過去12個月).
因此,上海中怡達的淨資產收益率為11%。就絕對值而言,這是一個令人滿意的回報率,但與機械行業6.6%的平均回報率相比,這要好得多。
查看我們對上海中怡達的最新分析
![roce](https://usnewsfile.futunn.com/pic/0-17738423-0-d61f6db6c72ae9d9889a457b714ff24a.png/big)
上證所:2022年12月14日900906的資本回報率
雖然過去並不代表未來,但瞭解一家公司歷史上的表現是有幫助的,這就是為什麼我們有上面的圖表。如果你想看看上海中怡達過去在其他指標上的表現,你可以查看以下內容免費過去收益、收入和現金流的圖表。
ROCE的發展趨勢
我們對上海中怡達的ROCE趨勢相當滿意。我們發現,過去五年的資本回報率上升了77%。這並不壞,因為這表明公司每投入一美元(投入的資本),就會增加從這一美元中賺取的金額。在資本投入方面,上海中怡達似乎正在用更少的資金獲得更多的收益,因為該公司運營的資本減少了31%。如果這種趨勢繼續下去,業務可能會變得更有效率,但總資產正在縮水。
還有一點需要注意的是,上海中怡達在此期間將流動負債降至總資產的21%,這有效地減少了來自供應商或短期債權人的資金。這告訴我們,上海中怡達在不依賴增加流動負債的情況下實現了回報增長,這讓我們非常滿意。
我們對上海中怡達ROCE的看法
簡而言之,我們很高興看到上海中怡達能夠用更少的資本產生更高的回報。過去五年,該公司股票的股東回報率高達41%,因此可以說,投資者開始意識到這些變化。有鑒於此,我們認為值得進一步研究這只股票,因為如果上海中怡達能夠保持這些趨勢,它可能會有一個光明的未來。
如果你想了解更多關於上海中怡達的資訊,我們已經發現3個警示標誌,其中一位和我們坐在一起不太舒服。
如果你想尋找收入豐厚的可靠公司,看看這個免費擁有良好資產負債表和可觀股本回報率的公司名單。
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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。