Returns On Capital At Novoray (SHSE:688300) Paint A Concerning Picture
Returns On Capital At Novoray (SHSE:688300) Paint A Concerning Picture
What trends should we look for it we want to identify stocks that can multiply in value over the long term? Firstly, we'd want to identify a growing return on capital employed (ROCE) and then alongside that, an ever-increasing base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after briefly looking over the numbers, we don't think Novoray (SHSE:688300) has the makings of a multi-bagger going forward, but let's have a look at why that may be.
Return On Capital Employed (ROCE): What Is It?
For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. The formula for this calculation on Novoray is:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)
0.13 = CN¥164m ÷ (CN¥1.4b - CN¥116m) (Based on the trailing twelve months to September 2022).
Thus, Novoray has an ROCE of 13%. In absolute terms, that's a satisfactory return, but compared to the Chemicals industry average of 8.9% it's much better.
View our latest analysis for Novoray
In the above chart we have measured Novoray's prior ROCE against its prior performance, but the future is arguably more important. If you'd like to see what analysts are forecasting going forward, you should check out our free report for Novoray.
What Does the ROCE Trend For Novoray Tell Us?
When we looked at the ROCE trend at Novoray, we didn't gain much confidence. Around five years ago the returns on capital were 17%, but since then they've fallen to 13%. Although, given both revenue and the amount of assets employed in the business have increased, it could suggest the company is investing in growth, and the extra capital has led to a short-term reduction in ROCE. And if the increased capital generates additional returns, the business, and thus shareholders, will benefit in the long run.
On a related note, Novoray has decreased its current liabilities to 8.5% of total assets. So we could link some of this to the decrease in ROCE. What's more, this can reduce some aspects of risk to the business because now the company's suppliers or short-term creditors are funding less of its operations. Some would claim this reduces the business' efficiency at generating ROCE since it is now funding more of the operations with its own money.
In Conclusion...
In summary, despite lower returns in the short term, we're encouraged to see that Novoray is reinvesting for growth and has higher sales as a result. And the stock has followed suit returning a meaningful 62% to shareholders over the last three years. So while the underlying trends could already be accounted for by investors, we still think this stock is worth looking into further.
If you want to continue researching Novoray, you might be interested to know about the 1 warning sign that our analysis has discovered.
For those who like to invest in solid companies, check out this free list of companies with solid balance sheets and high returns on equity.
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.
我們應該尋找什麼樣的趨勢,我們想要找出能夠長期成倍增值的股票?首先,我們想要確定一個不斷增長的退貨在已使用資本(ROCE)上,然後在此基礎上,不斷增加基地已動用資本的比例。如果你看到這個,通常意味著它是一家擁有出色商業模式和大量有利可圖的再投資機會的公司。然而,在簡單地看了一下數位之後,我們認為諾沃雷(上海證券交易所:688300)未來有可能成為一個多袋子的人,但讓我們看看為什麼會這樣。
資本回報率(ROCE):它是什麼?
對於那些不知道的人來說,ROCE是一家公司的年度稅前利潤(其回報)相對於業務資本的衡量標準。11月1日的計算公式為:
已動用資本回報率=息稅前收益(EBIT)?(總資產-流動負債)
0.13=CN元1.64億?(CN元14億-CN元1.16億)(基於截至2022年9月的過去12個月)。
因此,Novoray的淨資產收益率為13%。就絕對值而言,這是一個令人滿意的回報率,但與化工行業8.9%的平均回報率相比,這要好得多。
查看我們對11月的最新分析
在上面的圖表中,我們比較了Novoray之前的淨資產收益率和之前的表現,但可以說,未來更重要。如果您想查看分析師對未來的預測,您應該查看我們的免費為諾沃雷報道。
Novoray的ROCE趨勢告訴我們什麼?
當我們在Novoray上觀察ROCE趨勢時,我們並沒有獲得太多信心。大約五年前,資本回報率為17%,但自那以來已降至13%。儘管,考慮到收入和業務中使用的資產數量都有所增加,這可能表明該公司正在投資於增長,而額外的資本導致了ROCE的短期下降。如果增加的資本產生額外的回報,從長遠來看,企業和股東都將受益。
與此相關的是,Novoray已將其流動負債降至總資產的8.5%。因此,我們可以將其中一些因素與淨資產收益率的下降聯繫起來。更重要的是,這可以降低業務的某些方面的風險,因為現在該公司的供應商或短期債權人為其運營提供的資金減少了。一些人會說,這降低了企業產生淨資產收益率的效率,因為它現在用自己的錢為更多的運營提供資金。
總之..。
總而言之,儘管短期內回報較低,但我們感到鼓舞的是,Novoray正在為增長進行再投資,並因此獲得了更高的銷售額。過去三年,該公司股票也紛紛向股東返還了62%的回報。因此,雖然潛在的趨勢可能已經被投資者所解釋,但我們仍然認為這只股票值得進一步研究。
如果您想繼續研究Novoray,您可能會有興趣瞭解1個警告標誌我們的分析發現。
對於那些喜歡投資於穩固的公司,看看這個免費資產負債表穩健、股本回報率高的公司名單。
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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