Is Guangdong Electric Power Development Co., Ltd.'s (SZSE:000539) 1.7% ROE Worse Than Average?
Is Guangdong Electric Power Development Co., Ltd.'s (SZSE:000539) 1.7% ROE Worse Than Average?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Guangdong Electric Power Development Co., Ltd. (SZSE:000539).
儘管一些投資者已經精通財務指標(帽子提示),但本文適用於那些想了解股本回報率(ROE)及其重要性的人。通過邊幹邊學的方式,我們將研究投資回報率,以更好地了解廣東電力發展有限公司(SZSE: 000539)。
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
投資回報率或股本回報率是評估公司如何有效地從股東那裏獲得投資回報的有用工具。簡而言之,它衡量公司相對於股東權益的盈利能力。
How To Calculate Return On Equity?
如何計算股本回報率?
The formula for ROE is:
ROE 的公式是:
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 Guangdong Electric Power Development is:
因此,根據上述公式,廣東電力發展的投資回報率爲:
1.7% = CN¥512m ÷ CN¥30b (Based on the trailing twelve months to September 2023).
1.7% = 5.12億元人民幣 ÷ 300億元人民幣(基於截至2023年9月的過去十二個月)。
The 'return' refers to a company's earnings over the last year. So, this means that for every CN¥1 of its shareholder's investments, the company generates a profit of CN¥0.02.
“回報” 是指公司去年的收益。因此,這意味着公司每投資1元人民幣,公司就會產生0.02元人民幣的利潤。
Does Guangdong Electric Power Development Have A Good Return On Equity?
廣東電力發展有良好的股本回報率嗎?
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 is clear from the image below, Guangdong Electric Power Development has a lower ROE than the average (7.1%) in the Renewable Energy industry.
通過將公司的投資回報率與其行業平均水平進行比較,我們可以快速衡量其表現如何。這種方法的侷限性在於,有些公司與其他公司有很大不同,即使在相同的行業分類中也是如此。從下圖可以清楚地看出,廣東電力發展的投資回報率低於可再生能源行業的平均水平(7.1%)。
![roe](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240211/0-a1402a2b64924a0d53fed7c9f87e69ab-0-f89647b76cd51149765133de28fb1d30.png/big)
That's not what we like to see. Although, we think that a lower ROE could still mean that a company has the opportunity to better its returns with the use of leverage, provided its existing debt levels are low. A high debt company having a low ROE is a different story altogether and a risky investment in our books. Our risks dashboard should have the 2 risks we have identified for Guangdong Electric Power Development.
這不是我們喜歡看到的。但是,我們認爲,只要現有債務水平較低,較低的投資回報率仍可能意味着公司有機會通過使用槓桿提高回報。投資回報率低的高負債公司完全是另一回事,對我們的賬面來說也是一項風險投資。我們的風險儀表板應包含我們爲廣東電力發展確定的兩種風險。
How Does Debt Impact ROE?
債務如何影響投資回報率?
Most companies need money -- from somewhere -- to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first two cases, the ROE will capture this use of capital to grow. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
大多數公司需要來自某個地方的資金來增加利潤。投資現金可以來自上一年的利潤(留存收益)、發行新股或借款。在前兩個案例中,投資回報率將涵蓋這種資本用於增長的用途。在後一種情況下,用於增長的債務將提高回報,但不會影響總資產。以這種方式,債務的使用將提高投資回報率,儘管該業務的核心經濟學保持不變。
Guangdong Electric Power Development's Debt And Its 1.7% ROE
廣東電力發展的債務及其1.7%的投資回報率
It seems that Guangdong Electric Power Development uses a huge volume of debt to fund the business, since it has an extremely high debt to equity ratio of 3.01. We consider it to be a negative sign when a company has a rather low ROE despite a rather high debt to equity.
廣東電力發展似乎使用巨額債務爲該業務提供資金,因爲其負債權益比率極高,爲3.01。我們認爲,儘管負債與股本的比率相當高,但公司的投資回報率卻相當低,這是一個負面信號。
Summary
摘要
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. In our books, the highest quality companies have high return on equity, despite low debt. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
股本回報率是衡量企業創造利潤並將其返還給股東的能力的有用指標。在我們的賬簿中,儘管負債較低,但質量最高的公司仍具有很高的股本回報率。如果兩家公司的債務與股權比率大致相同,而一家公司的投資回報率更高,我通常更喜歡投資回報率更高的公司。
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. So I think it may be worth checking this free report on analyst forecasts for the company.
但是,投資回報率只是更大難題中的一部分,因爲高質量的企業通常以較高的收益倍數進行交易。與股票價格所反映的預期相比,利潤增長率尤其需要考慮。因此,我認爲可能值得查看這份關於分析師對公司的預測的免費報告。
Of course Guangdong Electric Power Development may not be the best stock to buy. So you may wish to see this free collection of other companies that have high ROE and low debt.
當然,廣東電力發展可能不是最好的買入股票。因此,您不妨免費查看其他投資回報率高、負債率低的公司的名單。
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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。