Zhejiang Huayou Cobalt Stock Forum

EPS fall has rattled some shareholders. Despite recent performance, long term shareholders gained 1.4% annually over 5 years. If data indicates sustainable growth, the sell-off could be a potential opportunity.

Zhejiang Huayou Cobalt's ROCE trend is disappointing, dropping from 37% to 6.2% in five years. The company's reinvestment hasn't produced higher returns, with only a 20% return to shareholders in the same period. Underlying trends hint at better investment opportunities elsewhere.

A low ROE combined with significant debt use is unappealing. High quality businesses can achieve high ROE without debt. Between two companies with same ROE, the less indebted is preferred.

Investors are skeptical about the company's ability to meet future growth expectations due to its low P/E ratio. Despite projected EPS growth, possible hidden threats to earnings prevent the P/E ratio from reflecting this growth.

Zhejiang Huayou CobaltLtd's declining ROCE trend is disheartening. Despite long-term growth reinvestment, significant sales increase remains elusive. Decrease in current liabilities may indicate less efficient ROCE generation, as more operations are company-funded. Stock gain of 58% over five years requires more positive underlying trends for optimism.