How Good Is Ping An Insurance (Group) Company of China, Ltd. (SHSE:601318), When It Comes To ROE?
How Good Is Ping An Insurance (Group) Company of China, Ltd. (SHSE:601318), When It Comes To ROE?
One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. We'll use ROE to examine Ping An Insurance (Group) Company of China, Ltd. (SHSE:601318), by way of a worked example.
我們能做的最好的投資之一是我們自己的知識和技能。考慮到這一點，本文將探討如何使用股本回報率（ROE）來更好地了解業務。我們將使用投資回報率來考察中國平安保險（集團）股份有限公司（SHSE: 601318），舉一個有效的例子。
Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
股本回報率或投資回報率是用於評估公司管理層利用公司資本效率的關鍵指標。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？
ROE can be calculated by using the formula:
ROE 可以通過以下公式計算：
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 Ping An Insurance (Group) Company of China is:
因此，根據上述公式，中國平安保險（集團）公司的投資回報率爲：
8.7% = CN¥108b ÷ CN¥1.2t (Based on the trailing twelve months to March 2024).
8.7% = 108億元人民幣 ÷ 1.2噸人民幣（基於截至2024年3月的過去十二個月）。
The 'return' is the yearly profit. That means that for every CN¥1 worth of shareholders' equity, the company generated CN¥0.09 in profit.
“回報” 是每年的利潤。這意味着，公司每獲得價值1元人民幣的股東權益，就會產生0.09元的利潤。
Does Ping An Insurance (Group) Company of China Have A Good ROE?
中國平安保險（集團）公司的投資回報率是否良好？
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. The image below shows that Ping An Insurance (Group) Company of China has an ROE that is roughly in line with the Insurance industry average (9.3%).
確定公司股本回報率是否不錯的一種簡單方法是將其與該行業的平均水平進行比較。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。下圖顯示，中國平安保險（集團）公司的投資回報率大致與保險行業的平均水平（9.3％）一致。
That isn't amazing, but it is respectable. While at least the ROE is not lower than the industry, its still worth checking what role the company's debt plays as high debt levels relative to equity may also make the ROE appear high. If a company takes on too much debt, it is at higher risk of defaulting on interest payments.
這並不奇怪，但值得尊敬。儘管至少投資回報率不低於該行業，但仍值得檢查該公司的債務起了什麼作用，因爲相對於股權的高債務水平也可能使投資回報率顯得很高。如果一家公司承擔了過多的債務，則拖欠利息的風險就會更高。
The Importance Of Debt To Return On Equity
債務對股本回報率的重要性
Companies usually need to invest money to grow their profits. That cash can come from issuing shares, retained earnings, or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
公司通常需要投資資金來增加利潤。這些現金可以來自發行股票、留存收益或債務。在第一和第二種情況下，投資回報率將反映現金用於企業投資的情況。在後一種情況下，使用債務將提高回報，但不會改變股權。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。
Combining Ping An Insurance (Group) Company of China's Debt And Its 8.7% Return On Equity
合併中國平安保險（集團）公司的債務及其8.7％的股本回報率
Ping An Insurance (Group) Company of China clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.78. Its ROE is quite low, even with the use of significant debt; that's not a good result, in our opinion. Debt increases risk and reduces options for the company in the future, so you generally want to see some good returns from using it.
中國平安保險（集團）公司顯然使用大量債務來提高回報，因爲其負債權益比率爲1.78。即使使用了巨額債務，其投資回報率也相當低；在我們看來，這不是一個好結果。債務會增加風險，減少公司未來的選擇，因此您通常希望從使用債務中獲得豐厚的回報。
Conclusion
結論
Return on equity is one way we can compare its business quality of different companies. 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.
股本回報率是我們可以比較不同公司的業務質量的一種方式。在我們的賬簿中，儘管債務很低，但質量最高的公司的股本回報率卻很高。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，那麼我通常更喜歡投資回報率更高的那家公司。
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. 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。相對於當前價格所反映的利潤增長預期，還必須考慮利潤可能的增長速度。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。
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
如果你更願意去另一家公司——一家財務狀況可能優越的公司——那麼千萬不要錯過這份免費的股本回報率高、債務低的有趣公司的名單。
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