Is Jiangsu Etern Company Limited's (SHSE:600105) Stock Price Struggling As A Result Of Its Mixed Financials?
Is Jiangsu Etern Company Limited's (SHSE:600105) Stock Price Struggling As A Result Of Its Mixed Financials?
With its stock down 24% over the past three months, it is easy to disregard Jiangsu Etern (SHSE:600105). It seems that the market might have completely ignored the positive aspects of the company's fundamentals and decided to weigh-in more on the negative aspects. Stock prices are usually driven by a company's financial performance over the long term, and therefore we decided to pay more attention to the company's financial performance. In this article, we decided to focus on Jiangsu Etern's ROE.
江蘇永鼎股份(SHSE: 600105)過去三個月下跌了24%,所以很容易被忽視,但看起來市場可能完全忽略了該公司基本面的積極方面,而更多地關注了負面因素。股票價格通常由公司長期的財務表現推動,因此我們決定更多地關注公司的財務表現。在本文中,我們決定關注江蘇永鼎的roe。
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 simpler terms, it measures the profitability of a company in relation to shareholder's equity.
股東要考慮的關鍵因素之一是淨資產收益率或roe,因爲它告訴他們公司如何有效地重新投資他們的資本。簡單點說,它衡量了公司與股東權益相關的盈利能力。
How Is ROE Calculated?
淨資產收益率怎麼計算?
The formula for ROE is:
roe的公式是:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
淨資產收益率 = 淨利潤(從持續經營中獲得)÷ 股東權益
So, based on the above formula, the ROE for Jiangsu Etern is:
那麼,根據上述公式,江蘇永鼎的roe爲:
3.7% = CN¥116m ÷ CN¥3.1b (Based on the trailing twelve months to March 2024).
3.7%=CN ¥ 11600萬 ÷ CN ¥ 31億(基於追溯到2024年3月的過去12個月)。
The 'return' refers to a company's earnings over the last year. So, this means that for every CN¥1 of its shareholder's investments, the company generates a profit of CN¥0.04.
「收益率」是指公司在過去一年中的收益。這意味着對於股東每投資1元人民幣,公司就能創造0.04元人民幣的利潤。
What Is The Relationship Between ROE And Earnings Growth?
ROE與盈利增長之間的關係是什麼?
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. 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.
到目前爲止,我們已經了解到roe是衡量公司利潤產生效率的指標。根據公司選擇再投資或「保留」其利潤的比例,我們隨後可以評估公司未來利潤的能力。其他條件都相同的情況下,roe和利潤保留率都較高的公司通常比沒有這些特徵的公司有更高的增長速度。
Jiangsu Etern's Earnings Growth And 3.7% ROE
Jiangsu Etern has very a high three-year median payout ratio of 113% suggesting that the company's shareholders are getting paid from more than just the company's earnings. Despite this, the company's earnings grew significantly as we saw above. Although, it could be worth keeping an eye on the high payout ratio as that's a huge risk. Our risks dashboard should have the 4 risks we have identified for Jiangsu Etern.
As you can see, Jiangsu Etern's ROE looks pretty weak. Not just that, even compared to the industry average of 6.2%, the company's ROE is entirely unremarkable. In spite of this, Jiangsu Etern was able to grow its net income considerably, at a rate of 21% in the last five years. Therefore, there could be other reasons behind this growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.
As a next step, we compared Jiangsu Etern's net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 15%.
Moreover, Jiangsu Etern is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years.
![past-earnings-growth](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240626/0-d1a839b26aa7b837d6092008570f242d-0-5184fbbe7f4ea479bc439da430652153.png/big)
Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. Is 600105 fairly valued? This infographic on the company's intrinsic value has everything you need to know.
Is Jiangsu Etern Making Efficient Use Of Its Profits?
江蘇永鼎是否有效利用了其利潤?
Jiangsu Etern has very a high three-year median payout ratio of 113% suggesting that the company's shareholders are getting paid from more than just the company's earnings. Despite this, the company's earnings grew significantly as we saw above. Although, it could be worth keeping an eye on the high payout ratio as that's a huge risk. Our risks dashboard should have the 4 risks we have identified for Jiangsu Etern.
江蘇永鼎具有非常高的三年中位股利支付率(113%),這表明公司的股東不僅從公司的盈利中獲得了報酬。儘管如此,正如我們上面所看到的,公司的盈利大幅增長。儘管如此,高股利支付率的風險也值得關注。我們的風險儀表板應包含我們已爲江蘇永鼎確定的四個風險。
Moreover, Jiangsu Etern is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years.
此外,江蘇永鼎決心繼續與股東分享其利潤,從至少十年的派息歷史中我們可以推斷出這一點。
Conclusion
結論
On the whole, we feel that the performance shown by Jiangsu Etern can be open to many interpretations. Although the company has shown a pretty impressive growth in earnings, yet the low ROE and the low rate of reinvestment makes us skeptical about the continuity of that growth, especially when or if the business comes to face any threats. With that said, the latest industry analyst forecasts reveal that the company's earnings are expected to accelerate. 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.
對本文有反饋?關於內容有所顧慮?直接和我們聯繫。或電郵 editorial-team (at) simplywallst.com。
這篇文章是Simply Wall St的一般性文章。我們根據歷史數據和分析師預測提供評論,只使用公正的方法論,我們的文章並不意味着提供任何金融建議。文章不構成買賣任何股票的建議,也不考慮您的目標或您的財務狀況。我們的目標是帶給您基本數據驅動的長期關注分析。請注意,我們的分析可能不考慮最新的價格敏感公司公告或定性材料。Simply Wall St沒有任何股票頭寸。
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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