Are Nanjing Panda Electronics Company Limited's (SHSE:600775) Mixed Financials Driving The Negative Sentiment?
Are Nanjing Panda Electronics Company Limited's (SHSE:600775) Mixed Financials Driving The Negative Sentiment?
With its stock down 9.5% over the past week, it is easy to disregard Nanjing Panda Electronics (SHSE:600775). It is possible that the markets have ignored the company's differing financials and decided to lean-in to the negative sentiment. Stock prices are usually driven by a company's financial performance over the long term, and therefore we decided to pay more attention to the company's financial performance. Particularly, we will be paying attention to Nanjing Panda Electronics' ROE today.
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
View our latest analysis for Nanjing Panda Electronics
How Is ROE Calculated?
Return on equity can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Nanjing Panda Electronics is:
2.0% = CN¥75m ÷ CN¥3.8b (Based on the trailing twelve months to September 2022).
The 'return' refers to a company's earnings 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.
What Has ROE Got To Do With Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. 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. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.
A Side By Side comparison of Nanjing Panda Electronics' Earnings Growth And 2.0% ROE
As you can see, Nanjing Panda Electronics' ROE looks pretty weak. Even compared to the average industry ROE of 7.6%, the company's ROE is quite dismal. Therefore, it might not be wrong to say that the five year net income decline of 24% seen by Nanjing Panda Electronics was possibly a result of it having a lower ROE. We believe that there also might be other aspects that are negatively influencing the company's earnings prospects. Such as - low earnings retention or poor allocation of capital.
So, as a next step, we compared Nanjing Panda Electronics' performance against the industry and were disappointed to discover that while the company has been shrinking its earnings, the industry has been growing its earnings at a rate of 10% in the same period.
SHSE:600775 Past Earnings Growth October 27th 2022The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Nanjing Panda Electronics is trading on a high P/E or a low P/E, relative to its industry.
Is Nanjing Panda Electronics Making Efficient Use Of Its Profits?
In spite of a normal three-year median payout ratio of 31% (that is, a retention ratio of 69%), the fact that Nanjing Panda Electronics' earnings have shrunk is quite puzzling. So there could be some other explanations in that regard. For instance, the company's business may be deteriorating.
Additionally, Nanjing Panda Electronics has paid dividends over a period of at least ten years, which means that the company's management is determined to pay dividends even if it means little to no earnings growth.
Summary
In total, we're a bit ambivalent about Nanjing Panda Electronics' performance. While the company does have a high rate of reinvestment, the low ROE means that all that reinvestment is not reaping any benefit to its investors, and moreover, its having a negative impact on the earnings growth. Wrapping up, we would proceed with caution with this company and one way of doing that would be to look at the risk profile of the business. To know the 1 risk we have identified for Nanjing Panda Electronics visit our risks dashboard for free.
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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.
在過去一週股價下跌9.5%的情況下,人們很容易忽視南京熊貓電子(上交所:600775)。市場可能忽視了該公司不同的財務狀況,決定向負面情緒傾斜。股票價格通常是由公司的長期財務表現推動的,因此我們決定更多地關注公司的財務表現。特別是今天我們將關注南京熊貓電子的淨資產收益率。
淨資產收益率,即股本回報率,是評估一家公司從股東那裏獲得投資回報的有效程度的有用工具。簡而言之,它是用來評估一家公司相對於其權益資本的盈利能力。
查看我們對南京熊貓電子的最新分析
淨資產收益率是如何計算的?
股本回報率可使用以下公式計算:
股本回報率=(持續經營的)淨利潤?股東權益
因此,根據上述公式,南京熊貓電子的淨資產收益率為:
2.0%=CN元7500萬×CN元38億元(基於截至2022年9月的12個月)。
“回報”指的是一家公司過去一年的收益。因此,這意味着股東每投資1元人民幣,公司就會產生0.02元的利潤。
淨資產收益率與盈利增長有什麼關係?
我們已經證實,淨資產收益率是一家公司未來收益的有效盈利指標。我們現在需要評估公司將多少利潤再投資或“保留”用於未來的增長,這就讓我們對公司的增長潛力有了一個瞭解。假設其他條件不變,淨資產收益率和利潤保留率越高,與不一定具有這些特徵的公司相比,公司的增長率就越高。
南京熊貓電子盈利增長與淨資產收益率2.0%的並列比較
如你所見,南京熊貓電子的淨資產收益率(ROE)看起來相當弱。即使與行業平均7.6%的淨資產收益率相比,該公司的淨資產收益率也相當慘淡。因此,説南京熊貓電子五年淨收益下降24%可能是因為其淨資產收益率較低,這可能是沒有錯的。我們認為,可能還有其他方面對公司的收益前景產生負面影響。例如-低收益留存或資本分配不佳。
因此,作為下一步,我們將南京熊貓電子的表現與行業進行了比較,令人失望的是,儘管該公司的收益一直在縮水,但同期該行業的收益一直以10%的速度增長。
上證綜指:過去收益增長600775 2022年10月27日賦予一家公司價值的基礎在很大程度上與其盈利增長掛鈎。投資者應該嘗試確定預期的收益增長或下降是否已計入價格,無論是哪種情況。這樣做將有助於他們確定該股的未來看起來是光明的還是不祥的。衡量預期收益增長的一個很好的指標是市盈率,它根據一隻股票的盈利前景決定市場願意為其支付的價格。因此,你可能想看看南京熊貓電子相對於其行業是高市盈率還是低市盈率。
南京熊貓電子是否在有效利用其利潤?
儘管正常的三年派息中值比率為31%(即留存比率為69%),但南京熊貓電子的盈利縮水令人頗為困惑。因此,在這方面可能會有其他一些解釋。例如,該公司的業務可能正在惡化。
此外,南京熊貓電子至少在十年內分紅,這意味着公司管理層決心分紅,即使這意味着收益幾乎沒有增長。
摘要
總體而言,我們對南京熊貓電子的表現有點矛盾。雖然該公司的再投資率確實很高,但低ROE意味着所有的再投資都沒有給投資者帶來任何好處,而且對收益增長產生了負面影響。總而言之,我們將謹慎對待這家公司,其中一種方法是查看業務的風險概況。要了解我們為南京熊貓電子確定的1個風險,請免費訪問我們的風險儀錶板。
對這篇文章有什麼反饋嗎?擔心內容嗎? 保持聯繫直接與我們聯繫。或者,也可以給編輯組發電子郵件,地址是implywallst.com。
本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。
譯文內容由第三人軟體翻譯。
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