Shanghai Jin Jiang International Hotels' (SHSE:900934) stock up by 3.2% over the past week. However, in this article, we decided to focus on its weak financials, as long-term fundamentals ultimately dictate market outcomes. In this article, we decided to focus on Shanghai Jin Jiang International Hotels' ROE.
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
Check out our latest analysis for Shanghai Jin Jiang International Hotels
How Do You Calculate Return On Equity?
The formula for ROE is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Shanghai Jin Jiang International Hotels is:
1.1% = CN¥190m ÷ CN¥17b (Based on the trailing twelve months to September 2022).
The 'return' is the profit over the last twelve months. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.01 in profit.
Why Is ROE Important For Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. 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. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes.
Shanghai Jin Jiang International Hotels' Earnings Growth And 1.1% ROE
As you can see, Shanghai Jin Jiang International Hotels' ROE looks pretty weak. Even compared to the average industry ROE of 5.1%, the company's ROE is quite dismal. For this reason, Shanghai Jin Jiang International Hotels' five year net income decline of 42% is not surprising given its lower ROE. We believe that there also might be other aspects that are negatively influencing the company's earnings prospects. For example, the business has allocated capital poorly, or that the company has a very high payout ratio.
Next, when we compared with the industry, which has shrunk its earnings at a rate of 8.9% in the same period, we still found Shanghai Jin Jiang International Hotels' performance to be quite bleak, because the company has been shrinking its earnings faster than the industry.
![past-earnings-growth](https://usnewsfile.futunn.com/pic/0-17300589-0-27bc88b0bde114e87125f2b897a9bb03.png/big)
SHSE:900934 Past Earnings Growth November 30th 2022
Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Shanghai Jin Jiang International Hotels is trading on a high P/E or a low P/E, relative to its industry.
Is Shanghai Jin Jiang International Hotels Using Its Retained Earnings Effectively?
With a high three-year median payout ratio of 53% (implying that 47% of the profits are retained), most of Shanghai Jin Jiang International Hotels' profits are being paid to shareholders, which explains the company's shrinking earnings. The business is only left with a small pool of capital to reinvest - A vicious cycle that doesn't benefit the company in the long-run. You can see the 2 risks we have identified for Shanghai Jin Jiang International Hotels by visiting our risks dashboard for free on our platform here.
Moreover, Shanghai Jin Jiang International Hotels has been paying dividends for at least ten years or more suggesting that management must have perceived that the shareholders prefer dividends over earnings growth.
Conclusion
In total, we would have a hard think before deciding on any investment action concerning Shanghai Jin Jiang International Hotels. The company has seen a lack of earnings growth as a result of retaining very little profits and whatever little it does retain, is being reinvested at a very low rate of return. With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.
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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.
上海锦江国际酒店(SHSE:900934)的股票在过去一周上涨了3.2%。但是,在本文中,我们决定将重点放在疲软的财务状况上,因为长期基本面最终决定了市场结果。在这篇文章中,我们决定重点关注上海锦江国际酒店的投资回报率。
股本回报率或投资回报率是对公司增值和管理投资者资金的有效性的考验。简而言之,它用于评估公司相对于其股权资本的盈利能力。
查看我们对上海锦江国际酒店的最新分析
你如何计算股本回报率?
这个 投资回报率公式 是:
股本回报率 = 净利润(来自持续经营)≥ 股东权益
因此,根据上述公式,上海锦江国际酒店的投资回报率为:
1.1% = cn¥1.90 m ≥ cn¥17b(基于截至2022年9月的过去十二个月)。
“回报” 是过去十二个月的利润。将其概念化的一种方法是,公司每拥有1美元的股东资本,就会获得0.01美元的利润。
为什么投资回报率对收益增长很重要?
我们已经确定,投资回报率是衡量公司未来收益的有效盈利指标。根据公司选择将多少利润进行再投资或 “保留”,我们便能够评估公司未来创造利润的能力。一般而言,在其他条件相同的情况下,股本回报率和利润留存率高的公司的增长率要高于不具有这些属性的公司。
上海锦江国际酒店的收益增长和1.1%的投资回报率
如你所见,上海锦江国际酒店的投资回报率看起来很弱。即使与5.1%的行业平均投资回报率相比,该公司的投资回报率也相当令人沮丧。出于这个原因,鉴于其较低的投资回报率,上海锦江国际酒店五年的净收入下降了42%并不奇怪。我们认为,可能还有其他方面对公司的收益前景产生负面影响。例如,企业的资本配置不佳,或者公司的派息率很高。
接下来,当我们与同期收益缩水8.9%的行业进行比较时,我们仍然发现上海锦江国际酒店的表现相当惨淡,因为该公司缩减收益的速度快于该行业。
![past-earnings-growth](https://usnewsfile.futunn.com/pic/0-17300589-0-27bc88b0bde114e87125f2b897a9bb03.png/big)
SHSE: 900934 过去的收益增长 2022 年 11 月 30 日
收益增长是估值股票时要考虑的重要指标。投资者接下来需要确定的是,预期的收益增长或缺乏收益增长是否已经包含在股价中。通过这样做,他们将知道种群是进入清澈的蓝色海水还是沼泽水域在等着你。衡量预期收益增长的一个很好的指标是市盈率,它根据收益前景决定了市场愿意为股票支付的价格。因此,您可能需要查看相对于其行业,上海锦江国际酒店的市盈率是高还是低。
上海锦江国际酒店是否有效使用了留存收益?
上海锦江国际酒店三年中位派息率高达53%(意味着保留了47%的利润),大部分利润都支付给了股东,这解释了该公司收益萎缩的原因。该企业只剩下少量资金可供再投资——从长远来看,这种恶性循环不会使公司受益。您可以访问我们的 “上海锦江国际酒店” 查看我们确定的两种风险 风险仪表板 在我们的平台上免费使用。
此外,上海锦江国际酒店已经支付股息至少十年或更长时间,这表明管理层一定已经意识到股东更喜欢分红而不是收益增长。
结论
总的来说,在决定任何与上海锦江国际酒店有关的投资行动之前,我们都要仔细考虑。由于保留的利润很少,该公司的收益增长乏力,无论保留多少利润,都以非常低的回报率进行再投资。话虽如此,我们研究了分析师的最新预测,发现尽管该公司过去曾缩减收益,但分析师预计其未来收益将增长。要了解有关公司未来收益增长预测的更多信息,请看这里 免费的 报告分析师对公司的预测,以了解更多信息。
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Simply Wall St 的这篇文章本质上是一般性的。 我们仅使用不偏不倚的方法根据历史数据和分析师预测提供评论,我们的文章并非旨在提供财务建议。 它不构成买入或卖出任何股票的建议,也没有考虑您的目标或财务状况。我们的目标是为您提供由基本面数据驱动的长期重点分析。请注意,我们的分析可能未将最新的价格敏感型公司公告或定性材料考虑在内。简而言之,华尔街对上述任何股票都没有头寸。