RongFa Nuclear Equipment's (SZSE:002366) Weak Earnings Might Be Worse Than They Appear
RongFa Nuclear Equipment's (SZSE:002366) Weak Earnings Might Be Worse Than They Appear
Shareholders didn't appear too concerned by RongFa Nuclear Equipment Co., Ltd.'s (SZSE:002366) weak earnings. We did some digging, and we believe that investors are missing some worrying factors underlying the profit figures.
股東們似乎對榮發核設備有限公司並不太擔心。”s (SZSE: 002366) 收益疲軟。我們進行了一些挖掘,我們認爲投資者遺漏了構成利潤數據的一些令人擔憂的因素。
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Zooming In On RongFa Nuclear Equipment's Earnings
放大榮發核設備的收益
Many investors haven't heard of the accrual ratio from cashflow, but it is actually a useful measure of how well a company's profit is backed up by free cash flow (FCF) during a given period. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. This ratio tells us how much of a company's profit is not backed by free cashflow.
許多投資者還沒有聽說過現金流的應計比率,但它實際上是衡量公司在給定時期內自由現金流(FCF)在多大程度上支持利潤的有用指標。爲了獲得應計比率,我們首先從一段時期的利潤中減去FCF,然後將該數字除以該期間的平均運營資產。這個比率告訴我們,一家公司的利潤中有多少沒有自由現金流的支持。
As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth.
因此,負的應計比率對公司來說是正數,而正的應計比率是負數。儘管應計比率爲正(表明非現金利潤達到一定水平)不是問題,但高應計比率可以說是一件壞事,因爲它表明紙質利潤與現金流不匹配。那是因爲一些學術研究表明,高應計比率往往會導致利潤下降或利潤增長放緩。
For the year to June 2024, RongFa Nuclear Equipment had an accrual ratio of 0.32. Unfortunately, that means its free cash flow was a lot less than its statutory profit, which makes us doubt the utility of profit as a guide. In the last twelve months it actually had negative free cash flow, with an outflow of CN¥1.1b despite its profit of CN¥216.8m, mentioned above. We also note that RongFa Nuclear Equipment's free cash flow was actually negative last year as well, so we could understand if shareholders were bothered by its outflow of CN¥1.1b. However, that's not all there is to consider. The accrual ratio is reflecting the impact of unusual items on statutory profit, at least in part.
在截至2024年6月的一年中,榮發核設備的應計比率爲0.32。不幸的是,這意味着其自由現金流遠少於其法定利潤,這使我們懷疑利潤作爲指導的效用。在過去的十二個月中,它的自由現金流實際上爲負數,儘管如上所述,其利潤爲21680萬元人民幣,但流出量仍爲11元人民幣。我們還注意到,榮發核設備去年的自由現金流實際上也是負的,因此我們可以理解股東是否被其11元人民幣的流出所困擾。但是,這還不是要考慮的全部。應計比率至少部分反映了不尋常項目對法定利潤的影響。
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of RongFa Nuclear Equipment.
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榮發核設備的資產負債表分析。
The Impact Of Unusual Items On Profit
不尋常物品對利潤的影響
The fact that the company had unusual items boosting profit by CN¥169m, in the last year, probably goes some way to explain why its accrual ratio was so weak. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. We ran the numbers on most publicly listed companies worldwide, and it's very common for unusual items to be once-off in nature. Which is hardly surprising, given the name. RongFa Nuclear Equipment had a rather significant contribution from unusual items relative to its profit to June 2024. All else being equal, this would likely have the effect of making the statutory profit a poor guide to underlying earnings power.
該公司去年有不尋常的項目將利潤提高了16900萬元人民幣,這一事實可能在某種程度上可以解釋其應計比率爲何如此疲軟。雖然我們希望看到利潤增加,但當不尋常的物品做出重大貢獻時,我們往往會更加謹慎一些。我們統計了全球大多數上市公司的數字,不尋常的物品在自然界中很常見。考慮到這個名字,這並不奇怪。截至2024年6月,榮發核設備從不尋常的項目中獲得了相當大的利潤。在其他條件相同的情況下,這可能會使法定利潤成爲衡量潛在盈利能力的不良指導。
Our Take On RongFa Nuclear Equipment's Profit Performance
我們對榮發核設備盈利表現的看法
Summing up, RongFa Nuclear Equipment received a nice boost to profit from unusual items, but could not match its paper profit with free cash flow. For the reasons mentioned above, we think that a perfunctory glance at RongFa Nuclear Equipment's statutory profits might make it look better than it really is on an underlying level. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've found that RongFa Nuclear Equipment has 2 warning signs (1 is potentially serious!) that deserve your attention before going any further with your analysis.
總而言之,榮發核設備從不尋常的物品中獲得了不錯的利潤提振,但其紙面利潤無法與自由現金流相提並論。出於上述原因,我們認爲,敷衍地看一眼榮發核設備的法定利潤可能會使其看起來比實際水平要好。考慮到這一點,除非我們對風險有透徹的了解,否則我們不會考慮投資股票。例如,我們發現榮發核設備有 2 個警告信號(1 個可能很嚴重!)在進行進一步分析之前,這值得你注意。
Our examination of RongFa Nuclear Equipment has focussed on certain factors that can make its earnings look better than they are. And, on that basis, we are somewhat skeptical. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
我們對榮發核設備的審查側重於某些可能使其收益看起來好於實際的因素。而且,在此基礎上,我們有些懷疑。但是,還有很多其他方法可以讓你對公司的看法。有些人認爲高股本回報率是優質業務的好兆頭。雖然可能需要你進行一些研究,但你可能會發現這份免費收集的擁有高股本回報率的公司,或者這份擁有大量內幕持股的股票清單很有用。
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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。