Huarong Chemical's (SZSE:301256) Profits May Not Reveal Underlying Issues
Huarong Chemical's (SZSE:301256) Profits May Not Reveal Underlying Issues
Following the solid earnings report from Huarong Chemical Co., Ltd. (SZSE:301256), the market responded by bidding up the stock price. However, we think that shareholders should be cautious as we found some worrying factors underlying the profit.
繼華榮化工有限公司(SZSE: 301256)發佈穩健的收益報告後,市場的回應是提高了股價。但是,我們認爲股東應謹慎行事,因爲我們發現了利潤背後的一些令人擔憂的因素。
Zooming In On Huarong Chemical's Earnings
放大華榮化工的收益
As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit. The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'.
正如金融迷已經知道的那樣,現金流的應計比率是評估公司自由現金流(FCF)與利潤匹配程度的關鍵指標。應計比率從給定時期的利潤中減去FCF,然後將結果除以該時間內公司的平均運營資產。你可以將現金流的應計比率視爲 “非FCF利潤率”。
Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future".
因此,當公司的應計比率爲負時,這實際上被認爲是一件好事,但如果其應計比率爲正,則是一件壞事。雖然應計比率高於零並不令人擔憂,但我們確實認爲,當公司的應計比率相對較高時,值得注意。引用Lewellen和Resutek在2014年發表的一篇論文,“應計額較高的公司將來的利潤往往會降低”。
Huarong Chemical has an accrual ratio of 0.35 for the year to December 2023. We can therefore deduce that its free cash flow fell well short of covering its statutory profit, suggesting we might want to think twice before putting a lot of weight on the latter. In the last twelve months it actually had negative free cash flow, with an outflow of CN¥10m despite its profit of CN¥138.7m, mentioned above. It's worth noting that Huarong Chemical generated positive FCF of CN¥81m a year ago, so at least they've done it in the past.
截至2023年12月的一年中,華榮化工的應計比率爲0.35。因此,我們可以推斷出其自由現金流遠不足以支付其法定利潤,這表明在對後者進行大量考慮之前,我們可能需要三思而後行。在過去的十二個月裏,它實際上有 負面的 自由現金流,儘管利潤爲1.387億元人民幣,但流出量仍爲1,000萬元人民幣,如上所述。值得注意的是,華榮化學一年前創造了8100萬元人民幣的正FCF,因此至少他們過去曾這樣做過。
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Huarong Chemical.
注意:我們始終建議投資者檢查資產負債表的實力。點擊此處查看我們對華榮化工的資產負債表分析。
Our Take On Huarong Chemical's Profit Performance
我們對華榮化工利潤表現的看法
As we have made quite clear, we're a bit worried that Huarong Chemical didn't back up the last year's profit with free cashflow. As a result, we think it may well be the case that Huarong Chemical's underlying earnings power is lower than its statutory profit. The good news is that, its earnings per share increased by 7.5% in the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. If you'd like to know more about Huarong Chemical as a business, it's important to be aware of any risks it's facing. For example, Huarong Chemical has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.
正如我們已經明確指出的那樣,我們有點擔心華榮化工沒有用自由現金流來支持去年的利潤。因此,我們認爲華榮化工的潛在盈利能力很可能低於其法定利潤。好消息是,其每股收益在去年增長了7.5%。當然,我們只是在分析其收益時才浮出水面;人們還可以考慮利潤率、預測增長和投資回報率等因素。如果您想進一步了解華榮化工作爲一家企業,請務必了解其面臨的任何風險。例如,華榮化學有兩個警告標誌(還有一個有點不愉快),我們認爲你應該知道。
Today we've zoomed in on a single data point to better understand the nature of Huarong Chemical's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.
今天,我們放大了單個數據點,以更好地了解華榮化學利潤的性質。但是,還有很多其他方法可以讓你對公司的看法。例如,許多人認爲高股本回報率是有利的商業經濟的標誌,而另一些人則喜歡 “關注資金”,尋找內部人士正在買入的股票。因此,你可能希望看到這份免費收藏的擁有高股本回報率的公司,或者這份內部人士正在購買的股票清單。
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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.
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Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。