Should Weakness in Kangmei Pharmaceutical Co., Ltd.'s (SHSE:600518) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?
Should Weakness in Kangmei Pharmaceutical Co., Ltd.'s (SHSE:600518) Stock Be Seen As A Sign That Market Will Correct The Share Price Given Decent Financials?
Kangmei Pharmaceutical (SHSE:600518) has had a rough month with its share price down 8.7%. 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 Kangmei Pharmaceutical's ROE.
ST康美（SHSE：600518）的股價下跌了8.7％，這是一個頗爲坎坷的月份。然而，長期來看，股票價格通常受公司的財務狀況影響，而在這種情況下，該公司的財務狀況相當不錯。在本文中，我們決定關注康美藥業的ROE。
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
股東權益回報率ROE是測試公司增值能力和管理股東投資的有效性的指標。更簡單地說，它衡量公司在股東權益中的盈利能力。
How Is ROE Calculated?
淨資產收益率怎麼計算？
The formula for ROE is:
roe的公式是：
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
淨資產收益率 = 淨利潤（從持續經營中獲得）÷ 股東權益
So, based on the above formula, the ROE for Kangmei Pharmaceutical is:
因此，根據上述公式，康美藥業的ROE爲：
2.3% = CN¥162m ÷ CN¥7.1b (Based on the trailing twelve months to March 2024).
2.3％= CN¥ 16200萬 ÷ CN¥ 71億（基於截至2024年3月的過去十二個月）。
The 'return' is the income the business earned 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」是企業過去一年所賺取的收入。這意味着，對於每個股東投資的人民幣1元，公司能夠創造CN¥0.02的利潤。
What Is The Relationship Between ROE And Earnings Growth?
ROE與盈利增長之間的關係是什麼？
Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. 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.
到目前爲止，我們已經知道ROE評估了公司利潤生成效率。現在我們需要評估公司回報率或「保留」了多少利潤以供未來增長，從而可以了解公司的增長潛力。總的來說，其他條件相同的情況下，具有高ROE和利潤保留的公司比沒有這些屬性的公司有更高的增長率。
Kangmei Pharmaceutical's Earnings Growth And 2.3% ROE
康美藥業的盈利增長和2.3％的ROE
It is hard to argue that Kangmei Pharmaceutical's ROE is much good in and of itself. Even when compared to the industry average of 7.6%, the ROE figure is pretty disappointing. However, the moderate 19% net income growth seen by Kangmei Pharmaceutical over the past five years is definitely a positive. We reckon that there could be other factors at play here. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.
很難說康美藥業的ROE本身很好。即使與行業平均水平7.6％相比，ROE指標也相當令人失望。然而，康美藥業過去五年中適度的19％淨利潤增長無疑是一個積極因素。我們認爲這裏可能有其他因素。例如，這家公司的管理層可能做出了一些很好的戰略決策，或者公司的派息比率很低。
Next, on comparing with the industry net income growth, we found that Kangmei Pharmaceutical's growth is quite high when compared to the industry average growth of 9.2% in the same period, which is great to see.
接下來，與行業淨利潤增長進行比較，我們發現與同期行業平均增長率9.2％相比，康美藥業的增長相當高，這是非常好的。
Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. Is Kangmei Pharmaceutical fairly valued compared to other companies? These 3 valuation measures might help you decide.
盈利增長是影響股票估值的重要因素。投資者應該嘗試確定預期的盈利增長或下降（無論哪種情況）是否已定價。然後，這有助於他們確定股票是否具備光明或黯淡的未來。與其他公司相比，康美藥業是否公平價值？這3個估值指標可能會幫助您做出決策。
Is Kangmei Pharmaceutical Efficiently Re-investing Its Profits?
康美藥業是否有效地重新投資其利潤？
Kangmei Pharmaceutical doesn't pay any regular dividends currently which essentially means that it has been reinvesting all of its profits into the business. This definitely contributes to the decent earnings growth number that we discussed above.
康美藥業目前不支付任何普通股息，這意味着它一直在將所有利潤重新投資股票。這無疑有助於上述可觀的盈利增長數字。
Conclusion
結論
In total, it does look like Kangmei Pharmaceutical has some positive aspects to its business. Despite its low rate of return, the fact that the company reinvests a very high portion of its profits into its business, no doubt contributed to its high earnings growth. While we won't completely dismiss the company, what we would do, is try to ascertain how risky the business is to make a more informed decision around the company. Our risks dashboard will have the 1 risk we have identified for Kangmei Pharmaceutical.
總的來說，康美藥業的業務具有一些積極的方面。雖然投資回報率較低，但公司將其利潤的很高比例再投資到業務中，這無疑有助於其高額盈利增長。雖然我們不會完全忽視該公司，但我們會嘗試確定業務的風險程度，以做出更明智的決策。我們的風險儀表板將列出我們爲康美藥業確定的1個風險。
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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.
對本文有任何反饋？對內容有任何疑慮？請直接與我們聯繫。或者，發送電子郵件至editorial-team@simplywallst.com。
這篇文章是Simply Wall St的一般性文章。我們根據歷史數據和分析師預測提供評論，只使用公正的方法論，我們的文章並不意味着提供任何金融建議。文章不構成買賣任何股票的建議，也不考慮您的目標或您的財務狀況。我們的目標是帶給您基本數據驅動的長期關注分析。請注意，我們的分析可能不考慮最新的價格敏感公司公告或定性材料。Simply Wall St沒有任何股票頭寸。
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
對本文有任何反饋？對內容有任何疑慮？請直接與我們聯繫。或者，發送電子郵件至editorial-team@simplywallst.com。