A low ROE combined with significant debt is unappealing. High quality businesses often achieve high ROE without debt. Between two companies with similar debt to equity levels, the one with a higher ROE is generally preferable.
Investor concerns persist about the possible decline in Hengli Petrochemical Ltd.'s revenue growth, as reflected in its lower P/S ratio. Lower-than-industry average growth forecast exacerbates these worries, suggesting investor reluctance may endure unless revenue prospects brighten.
Given Hengli PetrochemicalLtd's optimistic growth, now might not be the best time to buy as the price surpasses its true value. Existing shareholders should consider selling, with future price drops worth watching closely.
The declining trend in Hengli Petrochemical's ROCE and a high proportion of current liabilities may indicate risk, despite recent stock gains. Changes in underlying business trends will need to be positive for anticipated investor returns to improve in the future.
Despite a 13% annual dip and underperformance in the broader market, Hengli Petrochemical's future potential and favorable long-term growth could provide a buying op. Investors should consider warning signs, market conditions and fundamental data.
$Petrochina (601857.SH)$$Hengli Petrochemical (600346.SH)$ State energy major PetroChina 601857 and private refiner and chemical producer Hengli Petrochemical 600346 won four cargoes totalling about 4.43 million barrels in China's first public sale of state reserves, sources with direct knowledge of the auction said. PetroChina took the Qatar Marine and Fortis cargo both at $65 a barrel and Hengli bought the Oman cargo at $65 and Upper Zakum at $70.5. The sale of the fifth cargo of Murban crude was aborted. The sale was completed in less than an hour.
Hengli Petrochemical Stock Forum
State energy major PetroChina 601857 and private refiner and chemical producer Hengli Petrochemical 600346 won four cargoes totalling about 4.43 million barrels in China's first public sale of state reserves, sources with direct knowledge of the auction said.
PetroChina took the Qatar Marine and Fortis cargo both at $65 a barrel and Hengli bought the Oman cargo at $65 and Upper Zakum at $70.5.
The sale of the fifth cargo of Murban crude was aborted.
The sale was completed in less than an hour.
No comment yet