Why China Yangtze Power Co., Ltd. (SHSE:600900) Looks Like A Quality Company
Why China Yangtze Power Co., Ltd. (SHSE:600900) Looks Like A Quality Company
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 China Yangtze Power Co., Ltd. (SHSE:600900).
我们可以做的最好的投资之一就是投资自己的知识和技能。考虑到这一点,本文将介绍如何使用股本回报率(ROE)来更好地了解业务。为了使课程以实用性为基础,我们将使用ROE来更好地了解中国长江电力股份有限公司(SHSE: 600900)。
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Put another way, it reveals the company's success at turning shareholder investments into profits.
股本回报率或投资回报率是用于评估公司管理层利用公司资本效率的关键指标。换句话说,它揭示了公司成功地将股东投资转化为利润。
View our latest analysis for China Yangtze Power
查看我们对中国长江电力的最新分析
How To Calculate Return On Equity?
如何计算股本回报率?
The formula for ROE is:
ROE 的公式是:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股本回报率 = 净利润(来自持续经营业务)÷ 股东权益
So, based on the above formula, the ROE for China Yangtze Power is:
因此,根据上述公式,中国长江电力的投资回报率为:
12% = CN¥24b ÷ CN¥208b (Based on the trailing twelve months to September 2023).
12% = CN¥24b ¥208b(基于截至 2023 年 9 月的过去十二个月)。
The 'return' refers to a company's earnings over the last year. That means that for every CN¥1 worth of shareholders' equity, the company generated CN¥0.12 in profit.
“回报” 是指公司去年的收益。这意味着,公司每获得价值1元人民币的股东权益,就会产生0.12元人民币的利润。
Does China Yangtze Power Have A Good Return On Equity?
中国长江电力有良好的股本回报率吗?
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As you can see in the graphic below, China Yangtze Power has a higher ROE than the average (7.0%) in the Renewable Energy industry.
通过将公司的投资回报率与行业平均水平进行比较,我们可以快速衡量其表现如何。这种方法的局限性在于,有些公司与其他公司有很大不同,即使属于相同的行业分类也是如此。如下图所示,中国长江电力的投资回报率高于可再生能源行业的平均水平(7.0%)。
![roe](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20231117/0-61c6daa48d8c4a7952cf88c1bdd59ba9-0-957106e2f054edd7aa8942fd36a31f51.png/big)
That is a good sign. With that said, a high ROE doesn't always indicate high profitability. Aside from changes in net income, a high ROE can also be the outcome of high debt relative to equity, which indicates risk. To know the 2 risks we have identified for China Yangtze Power visit our risks dashboard for free.
这是个好兆头。话虽如此,高投资回报率并不总是表示盈利能力高。除了净收入的变化外,高投资回报率也可能是债务相对于权益较高的结果,这表明存在风险。要了解我们为中国长江电力确定的两大风险,请免费访问我们的风险仪表板。
The Importance Of Debt To Return On Equity
债务对股本回报率的重要性
Virtually all companies need money to invest in the business, to grow profits. That cash can come from issuing shares, retained earnings, or debt. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. That will make the ROE look better than if no debt was used.
实际上,所有公司都需要资金来投资业务,以增加利润。这些现金可以来自发行股票、留存收益或债务。在前两种情况下,ROE将利用这种资本来增长。在后一种情况下,增长所需的债务将提高回报,但不会影响股东权益。这将使投资回报率看起来比不使用债务时要好。
Combining China Yangtze Power's Debt And Its 12% Return On Equity
结合中国长江电力的债务及其12%的股本回报率
China Yangtze Power clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.57. With a fairly low ROE, and significant use of debt, it's hard to get excited about this business at the moment. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.
中国长江电力显然使用大量债务来提高回报,因为它的债务权益比率为1.57。由于投资回报率相当低,债务使用量大,目前很难对这项业务感到兴奋。债务确实带来了额外的风险,因此只有当一家公司从中获得可观的回报时,债务才真正值得。
Conclusion
结论
Return on equity is useful for comparing the quality of different businesses. In our books, the highest quality companies have high return on equity, despite low debt. All else being equal, a higher ROE is better.
股本回报率对于比较不同业务的质量很有用。在我们的账簿中,尽管债务很低,但质量最高的公司的股本回报率却很高。在其他条件相同的情况下,更高的投资回报率更好。
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. 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.
但是,投资回报率只是更大难题中的一部分,因为高质量的企业通常以较高的收益倍数进行交易。相对于当前价格所反映的利润增长预期,还必须考虑利润可能的增长速度。因此,我认为可能值得查看这份关于分析师对公司的预测的免费报告。
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
当然,通过寻找其他地方,你可能会找到一笔不错的投资。因此,来看看这份有趣的公司的免费清单吧。
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Simply Wall St的这篇文章本质上是笼统的。我们仅使用公正的方法根据历史数据和分析师的预测提供评论,我们的文章无意作为财务建议。它不构成买入或卖出任何股票的建议,也没有考虑到您的目标或财务状况。我们的目标是为您提供由基本数据驱动的长期重点分析。请注意,我们的分析可能不考虑最新的价格敏感型公司公告或定性材料。简而言之,华尔街没有持有任何上述股票的头寸。