Dencare (Chongqing) Oral Care's (SZSE:001328) Profits May Not Reveal Underlying Issues
Dencare (Chongqing) Oral Care's (SZSE:001328) Profits May Not Reveal Underlying Issues
Dencare (Chongqing) Oral Care Co., Ltd.'s (SZSE:001328) robust recent earnings didn't do much to move the stock. We believe that shareholders have noticed some concerning factors beyond the statutory profit numbers.
重庆德康(Chongqing)口腔护理有限公司(SZSE:001328)最近强劲的盈利对股票走势没有太大影响。我们相信股东已经注意到一些引起关注的因素,超出了法定利润数字。
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Examining Cashflow Against Dencare (Chongqing) Oral Care's Earnings
审视重庆德康口腔护理的现金流与盈利
Many investors haven't heard of the accrual ratio from cashflow, but it is actually a useful measure of how well a company's profit is backed up by free cash flow (FCF) during a given period. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. The ratio shows us how much a company's profit exceeds its FCF.
许多投资者并不了解从现金流量中计算的应计比率,但实际上它是一个衡量公司利润由自由现金流(FCF)在一定期间内支持的程度的有用指标。简单来说,这个比率将FCF从净利润中减去,然后将该数字除以公司在该期间内的平均经营资产。这个比率告诉我们公司的利润超过其FCF的多少。
That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future".
这意味着负的应计比率是一件好事,因为它显示公司带来的自由现金流比其利润所暗示的要多。虽然拥有正的应计比率不是问题,表明一定水平的非现金利润,但高的应计比率可以说是一件坏事,因为它表明纸面利润与现金流不匹配。引用Lewellen和Resutek 2014年的一篇论文“具有更高应计的公司趋向于在未来盈利更少”。
Dencare (Chongqing) Oral Care has an accrual ratio of 0.22 for the year to June 2024. Unfortunately, that means its free cash flow fell significantly short of its reported profits. Indeed, in the last twelve months it reported free cash flow of CN¥124m, which is significantly less than its profit of CN¥147.7m. At this point we should mention that Dencare (Chongqing) Oral Care did manage to increase its free cash flow in the last twelve months However, that's not all there is to consider. The accrual ratio is reflecting the impact of unusual items on statutory profit, at least in part.
重庆德康口腔护理截至2024年6月的应计比率为0.22。不幸的是,这意味着其自由现金流远低于其报告的利润。事实上,在过去12个月中,其报告的自由现金流为人民币1.24亿元,远远低于其利润1.47亿元。在这一点上,我们应该提到,重庆德康口腔护理确实设法在过去12个月增加其自由现金流。但这还不是所有需要考虑的。应计比率反映了法定利润中异常事项的影响,至少部分如此。
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
这可能会让您想知道分析师对未来盈利能力的预测。幸运的是,您可以单击此处查看基于其估计的未来盈利能力的互动图表。
How Do Unusual Items Influence Profit?
非常规项目如何影响利润?
The fact that the company had unusual items boosting profit by CN¥25m, in the last year, probably goes some way to explain why its accrual ratio was so weak. We can't deny that higher profits generally leave us optimistic, but we'd prefer it if the profit were to be sustainable. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. Which is hardly surprising, given the name. If Dencare (Chongqing) Oral Care doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year.
该公司在过去一年中,非常规项目增加了2,500万人民币的利润,这或许可以解释为什么其应计率如此之低。我们不能否认,更高的利润通常让我们感到乐观,但我们更希望利润能够持续。当我们分析全球绝大多数上市公司时,我们发现显著的非常规项目往往不会重复出现。这并不令人意外,考虑到其名称的含义。如果康桥口腔护理(重庆)不能再次获得这种贡献,那么其他一切都保持不变的话,我们预计其利润在本年度会下降。
Our Take On Dencare (Chongqing) Oral Care's Profit Performance
对于康桥口腔护理(重庆)的盈利表现,这是我们的观点
Summing up, Dencare (Chongqing) Oral Care received a nice boost to profit from unusual items, but could not match its paper profit with free cash flow. For the reasons mentioned above, we think that a perfunctory glance at Dencare (Chongqing) Oral Care's statutory profits might make it look better than it really is on an underlying level. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 2 warning signs for Dencare (Chongqing) Oral Care you should be mindful of and 1 of them can't be ignored.
总结一下,康桥口腔护理(重庆)从非常规项目中获得了一笔不错的利润,但无法用自由现金流匹配其账面利润。出于上述原因,我们认为对康桥口腔护理(重庆)的法定利润进行肤浅的审视,可能会使其在基本水平上看起来比实际情况更好。因此,如果您想深入了解这支股票,重要的是要考虑它所面临的任何风险。这就是一个例子:我们发现了2个值得注意的康桥口腔护理(重庆)的警示信号,您应该注意其中1个信号。
In this article we've looked at a number of factors that can impair the utility of profit numbers, and we've come away cautious. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
在这篇文章中,我们已经看到了许多可以削弱利润数字实用性的因素,并且我们留下了审慎的心态。但是,如果您能够专注于细节,那么总能发现更多。一些人认为高股东回报率是优质企业的良好迹象。尽管这可能需要您进行一些研究,但您可能会发现这个高股东回报率公司列表或至少有一个重要内部持股的股票列表对您有所帮助。
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