Shenzhen SEG Co.,Ltd (SZSE:200058) just reported healthy earnings but the stock price didn't move much. We think that investors have missed some encouraging factors underlying the profit figures.
See our latest analysis for Shenzhen SEGLtd
SZSE:200058 Earnings and Revenue History November 3rd 2022
A Closer Look At Shenzhen SEGLtd's Earnings
One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'.
That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. That is not intended to imply we should worry about a positive accrual ratio, but it's worth noting where the accrual ratio is rather high. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future".
Over the twelve months to September 2022, Shenzhen SEGLtd recorded an accrual ratio of -0.30. That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow. In fact, it had free cash flow of CN¥712m in the last year, which was a lot more than its statutory profit of CN¥12.8m. Shenzhen SEGLtd's free cash flow improved over the last year, which is generally good to see. However, that's not all there is to consider. We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio.
Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Shenzhen SEGLtd.
The Impact Of Unusual Items On Profit
While the accrual ratio might bode well, we also note that Shenzhen SEGLtd's profit was boosted by unusual items worth CN¥9.0m in the last twelve months. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. 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. If Shenzhen SEGLtd doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.
Our Take On Shenzhen SEGLtd's Profit Performance
In conclusion, Shenzhen SEGLtd's accrual ratio suggests its statutory earnings are of good quality, but on the other hand the profits were boosted by unusual items. Based on these factors, we think that Shenzhen SEGLtd's profits are a reasonably conservative guide to its underlying profitability. So while earnings quality is important, it's equally important to consider the risks facing Shenzhen SEGLtd at this point in time. To that end, you should learn about the 2 warning signs we've spotted with Shenzhen SEGLtd (including 1 which can't be ignored).
Our examination of Shenzhen SEGLtd has focussed on certain factors that can make its earnings look better than they are. 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.
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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.
深圳市賽格股份有限公司(SZSE：200058)剛剛公佈了健康的收益，但股價沒有太大變動。我們認為，投資者沒有預料到利潤數字背後的一些鼓舞人心的因素。
查看我們對深圳賽格股份有限公司的最新分析
SZSE：200058收益和收益歷史2022年11月3日
仔細看看深圳賽格股份有限公司的收益
衡量一家公司將利潤轉換為自由現金流(FCF)的程度的一個關鍵財務比率是應計比率。簡單地説，這個比率是從淨利潤中減去FCF，然後用這個數字除以該公司在此期間的平均運營資產。你可以把來自現金流的應計比率看作是‘非FCF利潤率’。
這意味着負的應計比率是一件好事，因為它表明該公司帶來的自由現金流比其利潤所暗示的要多。這並不意味着我們應該擔心應計比率為正，但值得注意的是，在應計比率相當高的地方。引用勒維倫和雷蘇泰克2014年的一篇論文，“應計利潤較高的公司未來的利潤往往較低”。
在截至2022年9月的12個月內，深圳賽格股份有限公司的應計比率為-0.30。這意味着它有非常好的現金轉換率，而且它去年的收益實際上大大低估了它的自由現金流。事實上，該公司去年的自由現金流為7.12億加元，遠高於其1280萬加元的法定利潤。深圳賽格股份有限公司的自由現金流在去年有所改善，總體來説是好的。然而，這並不是需要考慮的全部問題。我們可以看到，不尋常的項目影響了其法定利潤，從而影響了應計比率。
注：我們總是建議投資者檢查資產負債表的實力。點擊此處查看我們對深圳賽格股份有限公司的資產負債表分析。
異常項目對利潤的影響
雖然應計比率可能是個好兆頭，但我們也注意到，深圳賽格股份有限公司的利潤在過去12個月裏受到價值900萬元人民幣的不尋常項目的提振。我們不能否認，更高的利潤通常會讓我們保持樂觀，但如果利潤是可持續的，我們更願意這樣做。我們對全球大多數上市公司進行了統計，不尋常的項目在性質上是一次性的，這是非常常見的。考慮到這個名字，這並不令人驚訝。如果深圳賽格股份有限公司沒有看到這種貢獻再次出現，那麼在其他條件相同的情況下，我們預計該公司今年的利潤將會下降。
我們對深圳賽格股份有限公司盈利表現的看法
總而言之，深圳賽格股份有限公司的應計比率表明，其法定收益質量良好，但另一方面，利潤受到不尋常項目的提振。基於這些因素，我們認為深圳賽格股份有限公司的利潤是其潛在盈利能力的一個相當保守的指標。因此，儘管盈利質量很重要，但考慮到深圳賽格股份有限公司目前面臨的風險也同樣重要。為此，您應該瞭解2個警告標誌我們已經發現了深圳賽格股份有限公司(包括1家不容忽視的公司)。
我們對深圳賽格股份有限公司的調查集中在某些因素上，這些因素可能會讓它的收益看起來比實際情況更好。但還有很多其他方式可以讓你瞭解一家公司的看法。例如，許多人認為高股本回報率是有利的商業經濟指標，而另一些人則喜歡“跟着錢走”，尋找內部人士正在買入的股票。所以你可能想看看這個免費擁有高股本回報率的公司的集合，或內部人士正在購買的這份股票清單。
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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。
