Should Weakness in Sichuan Huafeng Technology Co., LTD.'s (SHSE:688629) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?
Should Weakness in Sichuan Huafeng Technology Co., LTD.'s (SHSE:688629) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?
Sichuan Huafeng Technology (SHSE:688629) has had a rough three months with its share price down 38%. However, stock prices are usually driven by a company's financials over the long term, which in this case look pretty respectable. In this article, we decided to focus on Sichuan Huafeng Technology's ROE.
四川華豐科技（上海證券交易所代碼：688629）經歷了艱難的三個月，其股價下跌了38％。但是，從長遠來看，股票價格通常由公司的財務狀況驅動，在這種情況下，這看起來相當可觀。在本文中，我們決定重點關注四川華豐科技的投資回報率。
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
股本回報率或投資回報率是用於評估公司管理層利用公司資本效率的關鍵指標。簡而言之，它用於評估公司相對於其股權資本的盈利能力。
How Is ROE Calculated?
ROE 是如何計算的？
ROE can be calculated by using the formula:
ROE 可以通過以下公式計算：
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股本回報率 = 淨利潤（來自持續經營業務）÷ 股東權益
So, based on the above formula, the ROE for Sichuan Huafeng Technology is:
因此，根據上述公式，四川華豐科技的投資回報率爲：
3.9% = CN¥58m ÷ CN¥1.5b (Based on the trailing twelve months to September 2023).
3.9% = 5800萬元人民幣 ÷ 15億元人民幣（基於截至2023年9月的過去十二個月）。
The 'return' is the income the business earned over the last year. That means that for every CN¥1 worth of shareholders' equity, the company generated CN¥0.04 in profit.
“回報” 是企業在過去一年中獲得的收入。這意味着，每獲得價值1元人民幣的股東權益，該公司就會產生0.04元人民幣的利潤。
What Is The Relationship Between ROE And Earnings Growth?
投資回報率與收益增長之間有什麼關係？
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. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.
我們已經確定，投資回報率是衡量公司未來收益的有效盈利指標。根據公司選擇將多少利潤進行再投資或 “保留”，我們便能夠評估公司未來創造利潤的能力。假設其他條件都一樣，與功能不相同的公司相比，具有更高股本回報率和更高利潤保留率的公司通常具有更高的增長率。
Sichuan Huafeng Technology's Earnings Growth And 3.9% ROE
四川華豐科技的收益增長和3.9％的投資回報率
As you can see, Sichuan Huafeng Technology's ROE looks pretty weak. Even when compared to the industry average of 7.2%, the ROE figure is pretty disappointing. Despite this, surprisingly, Sichuan Huafeng Technology saw an exceptional 61% net income growth over the past five years. We reckon that there could be other factors at play here. Such as - high earnings retention or an efficient management in place.
如你所見，四川華豐科技的投資回報率看起來相當疲軟。即使與7.2％的行業平均水平相比，投資回報率的數字也相當令人失望。儘管如此，令人驚訝的是，四川華豐科技在過去五年中實現了61％的驚人淨收入增長。我們認爲這裏可能還有其他因素在起作用。例如——高收益留存率或實行高效管理。
Next, on comparing with the industry net income growth, we found that Sichuan Huafeng Technology's growth is quite high when compared to the industry average growth of 14% in the same period, which is great to see.
接下來，與行業淨收入增長相比，我們發現，與同期行業平均增長14％相比，四川華豐科技的增長相當高，這令人欣喜。
Earnings growth is a huge factor in stock valuation. It's important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). This then helps them determine if the stock is placed for a bright or bleak future. 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 Sichuan Huafeng Technology is trading on a high P/E or a low P/E, relative to its industry.
收益增長是股票估值的重要因素。對於投資者來說，重要的是要知道市場是否對公司的預期收益增長（或下降）進行了定價。然後，這可以幫助他們確定股票是爲光明還是暗淡的未來而佈局。衡量預期收益增長的一個很好的指標是市盈率，它根據收益前景決定了市場願意爲股票支付的價格。因此，您可能需要檢查四川華豐科技相對於其行業是高市盈率還是低市盈率。
Is Sichuan Huafeng Technology Making Efficient Use Of Its Profits?
四川華豐科技是否在有效利用其利潤？
Sichuan Huafeng Technology doesn't pay any dividend currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the high earnings growth number that we discussed above.
四川華豐科技目前不派發任何股息，這實質上意味着它一直在將所有利潤再投資於該業務。這無疑促成了我們上面討論的高收益增長數字。
Conclusion
結論
On the whole, we do feel that Sichuan Huafeng Technology has some positive attributes. With a high rate of reinvestment, albeit at a low ROE, the company has managed to see a considerable growth in its earnings. That being so, a study of the latest analyst forecasts show that the company is expected to see a slowdown in its future earnings growth. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.
總的來說，我們確實認爲四川華豐科技具有一些積極的屬性。儘管投資回報率很低，但由於再投資率很高，該公司的收益實現了可觀的增長。既然如此，對分析師最新預測的研究表明，預計該公司未來的收益增長將放緩。要詳細了解分析師對公司的最新預測，請查看該公司的分析師預測的可視化。
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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。