Can Kunshan Huguang Auto Harness Co.,Ltd.'s (SHSE:605333) ROE Continue To Surpass The Industry Average?
Can Kunshan Huguang Auto Harness Co.,Ltd.'s (SHSE:605333) ROE Continue To Surpass The Industry Average?
One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we'll use ROE to better understand Kunshan Huguang Auto Harness Co.,Ltd. (SHSE:605333).
我們最好的投資之一是投資於自己的知識和技能。有了這樣的想法，本文將通過ROE來更好地理解業務。爲了讓本課程更加具有實際意義，我們將使用ROE來更好地了解滬光股份（SHSE:605333）。
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
roe或股東權益回報率是評估公司如何有效地從股東那裏獲得回報的有用工具。簡而言之，它用於評估公司相對於其權益資本的盈利能力。
How To Calculate Return On Equity?
如何計算股東權益報酬率？
The formula for return on equity is:
權益回報率的計算公式是：
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 Kunshan Huguang Auto HarnessLtd is:
那麼，根據上述公式，滬光股份的ROE爲：
11% = CN¥180m ÷ CN¥1.6b (Based on the trailing twelve months to March 2024).
11％=CN¥ 18000萬÷CN¥ 16億（基於截至2024年3月的過去十二個月）。
The 'return' is the profit over the last twelve months. One way to conceptualize this is that for each CN¥1 of shareholders' capital it has, the company made CN¥0.11 in profit.
「回報率」即過去12個月的利潤。也就是說，對於每一元股東資本，公司創造了0.11元的利潤。
Does Kunshan Huguang Auto HarnessLtd Have A Good Return On Equity?
滬光股份ROE良好嗎？
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As is clear from the image below, Kunshan Huguang Auto HarnessLtd has a better ROE than the average (8.2%) in the Auto Components industry.
判斷公司是否具有良好的股本回報率的一種簡單方法是將其與所處行業的平均水平進行比較。然而，由於同一行業內的公司差異較大，因此這不是一種完美的衡量方法。正如下圖所示，滬光股份的ROE超過了汽車元件行業的平均水平（8.2％）。
That is a good sign. Bear in mind, a high ROE doesn't always mean superior financial performance. Especially when a firm uses high levels of debt to finance its debt which may boost its ROE but the high leverage puts the company at risk.
這是一個好跡象。請記住，高ROE並不總是意味着出色的財務表現，特別是當公司使用高額的債務來融資其債務時，這可能會提高其ROE，但高槓杆率會將公司置於風險之中。
How Does Debt Impact ROE?
債務對ROE的影響是怎樣的？
Most companies need money -- from somewhere -- to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
Combining Kunshan Huguang Auto HarnessLtd's Debt And Its 11% Return On Equity
結合滬光股份的負債和11％的ROE
It's worth noting the high use of debt by Kunshan Huguang Auto HarnessLtd, leading to its debt to equity ratio of 1.22. Its ROE is quite low, even with the use of significant debt; that's not a good result, in our opinion. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.
值得注意的是，滬光股份使用了大量的債務，導致其資產負債比爲1.22。即使債務使用了相當多，其ROE仍相當低，這在我們看來並不是一個好結果。債務確實會帶來額外的風險，因此只有在公司從中獲得了一些不錯的回報時才真正值得。
Conclusion
結論
Return on equity is one way we can compare its business quality of different companies. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
股東權益回報率是比較不同公司業務質量的方法之一。可以在沒有太多債務的情況下實現高股東權益回報率的公司通常質量較好。如果兩家公司的負債權益比大約相同，並且一家公司ROE較高，我通常更喜歡ROE較高的公司。
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking this free report on analyst forecasts for the company.
儘管ROE是業務質量的一個有用指標，但您需要考慮一系列因素，以確定購買股票的正確價格。預計利潤增長的速度與當前價格所反映的利潤增長預期相對比也必須考慮在內。因此，我認爲檢查該公司分析師預測的免費報告可能值得一試。
But note: Kunshan Huguang Auto HarnessLtd may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
但請注意：滬光股份可能不是最好的股票買入選擇。所以來看看這份免費的高ROE、低債務有趣公司的列表吧。
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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.
對本文有任何反饋？對內容有任何疑慮？請直接與我們聯繫。或者，發送電子郵件至editorial-team@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
對本文有任何反饋？對內容有任何疑慮？請直接與我們聯繫。或者，發送電子郵件至editorial-team@simplywallst.com。