Could The Market Be Wrong About Novoray Corporation (SHSE:688300) Given Its Attractive Financial Prospects?
Could The Market Be Wrong About Novoray Corporation (SHSE:688300) Given Its Attractive Financial Prospects?
Novoray (SHSE:688300) has had a rough three months with its share price down 8.1%. But if you pay close attention, you might gather that its strong financials could mean that the stock could potentially see an increase in value in the long-term, given how markets usually reward companies with good financial health. Specifically, we decided to study Novoray's ROE in this article.
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
View our latest analysis for Novoray
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 Novoray is:
15% = CN¥175m ÷ CN¥1.2b (Based on the trailing twelve months to September 2022).
The 'return' is the yearly profit. Another way to think of that is that for every CN¥1 worth of equity, the company was able to earn CN¥0.15 in profit.
Why Is ROE Important For Earnings Growth?
So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.
Novoray's Earnings Growth And 15% ROE
At first glance, Novoray seems to have a decent ROE. Especially when compared to the industry average of 9.6% the company's ROE looks pretty impressive. This probably laid the ground for Novoray's significant 32% net income growth seen over the past five years. We reckon that there could also be other factors at play here. For instance, the company has a low payout ratio or is being managed efficiently.
Next, on comparing with the industry net income growth, we found that Novoray's growth is quite high when compared to the industry average growth of 20% in the same period, which is great to see.
SHSE:688300 Past Earnings Growth December 20th 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. This then helps them determine if the stock is placed for a bright or bleak future. Is Novoray fairly valued compared to other companies? These 3 valuation measures might help you decide.
Is Novoray Using Its Retained Earnings Effectively?
Novoray has a three-year median payout ratio of 30% (where it is retaining 70% of its income) which is not too low or not too high. By the looks of it, the dividend is well covered and Novoray is reinvesting its profits efficiently as evidenced by its exceptional growth which we discussed above.
Along with seeing a growth in earnings, Novoray only recently started paying dividends. Its quite possible that the company was looking to impress its shareholders.
Conclusion
On the whole, we feel that Novoray's performance has been quite good. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices. Not to forget, share price outcomes are also dependent on the potential risks a company may face. So it is important for investors to be aware of the risks involved in the business. You can see the 2 risks we have identified for Novoray by visiting our risks dashboard for free on our platform here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
聯瑞(SHSE: 688300)經歷了艱難的三個月,其股價下跌了8.1%。但是,如果你密切關注,你可能會發現,鑑於市場通常會獎勵財務狀況良好的公司,其強勁的財務狀況可能意味着該股的價值從長遠來看可能會增加。具體而言,我們決定在本文中研究聯瑞的投資回報率。
股本回報率或投資回報率是對公司增值和管理投資者資金的有效性的考驗。簡而言之,它衡量公司相對於股東權益的盈利能力。
查看我們對聯瑞的最新分析
ROE 是如何計算的?
股本回報率可以通過使用以下公式計算:
股本回報率 = 淨利潤(來自持續經營業務)÷ 股東權益
因此,根據上述公式,聯瑞的投資回報率爲:
15% = 1.75億人民幣 ÷ 12億元人民幣(基於截至2022年9月的過去十二個月)。
“回報” 是每年的利潤。另一種思考方式是,公司每持有價值1元人民幣的股權,就能獲得0.15元人民幣的利潤。
爲甚麼投資回報率對收益增長很重要?
到目前爲止,我們已經瞭解到,投資回報率是衡量公司盈利能力的指標。然後,我們能夠評估公司的收益增長潛力,具體取決於公司對這些利潤進行再投資或 “保留” 了多少及其有效性。假設其他條件都一樣,與功能不相同的公司相比,具有更高股本回報率和更高利潤保留率的公司通常具有更高的增長率。
聯瑞的收益增長和15%的投資回報率
乍一看,聯瑞的投資回報率似乎不錯。尤其是與行業平均水平9.6%相比,該公司的投資回報率看起來相當可觀。這可能爲聯瑞在過去五年中實現32%的顯著淨收入增長奠定了基礎。我們認爲這裏還可能有其他因素在起作用。例如,該公司的派息率較低或管理效率很高。
接下來,與行業淨收入增長相比,我們發現與同期行業平均增長20%相比,聯瑞的增長相當高,這值得一看。
SHSE: 688300 2022 年 12 月 20 日過去的收益增長賦予公司價值的基礎在很大程度上與其收益增長息息相關。無論如何,投資者應努力確定預期的收益增長或下降是否已計入其中。然後,這可以幫助他們確定股票是爲光明的還是暗淡的未來準備的。與其他公司相比,Novoray的估值是否公平?這三種估值衡量標準可能會幫助您做出決定。
聯瑞是否在有效使用其留存收益?
聯瑞的三年中位支付率爲30%(保留了70%的收入),既不太低也不太高。從外觀上看,股息覆蓋面很好,聯瑞正在有效地進行利潤再投資,我們在上面討論的非凡增長就證明了這一點。
除了收益增長外,聯瑞直到最近才開始支付股息。該公司很可能想給股東留下深刻的印象。
結論
總的來說,我們覺得聯瑞的表現相當不錯。特別是,我們喜歡該公司對其業務進行大量再投資,並且回報率很高。毫不奇怪,這帶來了令人印象深刻的收益增長。鑑於每股收益對長期股價的影響,如果該公司繼續以原樣增長收益,那可能會對其股價產生積極影響。別忘了,股價結果還取決於公司可能面臨的潛在風險。因此,對於投資者來說,重要的是要意識到業務所涉及的風險。您可以訪問我們的網站,查看我們爲聯瑞確定的 2 種風險 風險儀表板 在我們的平臺上免費使用。
對這篇文章有反饋嗎?擔心內容嗎? 取得聯繫 直接和我們在一起。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St 的這篇文章本質上是籠統的。 我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。 它不構成買入或賣出任何股票的建議,也沒有考慮您的目標或財務狀況。我們的目標是爲您提供由基本面數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感公司公告或定性材料。簡而言之,華爾街在上述任何股票中都沒有頭寸。
譯文內容由第三人軟體翻譯。
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