Can Wanhua Chemical Group Co., Ltd.'s (SHSE:600309) ROE Continue To Surpass The Industry Average?
Can Wanhua Chemical Group Co., Ltd.'s (SHSE:600309) ROE Continue To Surpass The Industry Average?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. We'll use ROE to examine Wanhua Chemical Group Co., Ltd. (SHSE:600309), by way of a worked example.
儘管一些投資者已經精通財務指標（帽子提示），但本文適用於那些想了解股本回報率（ROE）及其重要性的人。我們將以投資回報率來考察萬華化學集團有限公司（SHSE: 600309），舉一個有效的例子。
Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
股本回報率或投資回報率是股東需要考慮的重要因素，因爲它可以告訴他們資本再投資的有效性。簡而言之，投資回報率顯示了每美元從其股東投資中產生的利潤。
How Is ROE Calculated?
ROE 是如何計算的？
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 Wanhua Chemical Group is:
因此，根據上述公式，萬華化學集團的投資回報率爲：
19% = CN¥18b ÷ CN¥99b (Based on the trailing twelve months to March 2024).
19% = 180億元人民幣 ÷ 99億元人民幣（基於截至2024年3月的過去十二個月）。
The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every CN¥1 worth of equity, the company was able to earn CN¥0.19 in profit.
“回報” 是過去十二個月的稅後收入。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0.19元的利潤。
Does Wanhua Chemical Group Have A Good ROE?
萬華化學集團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. As you can see in the graphic below, Wanhua Chemical Group has a higher ROE than the average (6.3%) in the Chemicals industry.
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。如下圖所示，萬華化學集團的投資回報率高於化工行業的平均水平（6.3％）。
That is a good sign. Bear in mind, a high ROE doesn't always mean superior financial performance. Aside from changes in net income, a high ROE can also be the outcome of high debt relative to equity, which indicates risk. Our risks dashboardshould have the 3 risks we have identified for Wanhua Chemical Group.
這是一個好兆頭。請記住，高投資回報率並不總是意味着卓越的財務業績。除了淨收入的變化外，較高的投資回報率也可能是高債務相對於股本的結果，這表明存在風險。我們的風險儀表板應包含我們爲萬華化學集團確定的三種風險。
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. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
公司通常需要投資來增加利潤。投資現金可以來自上一年的利潤（留存收益）、發行新股或借款。對於第一和第二種選擇，投資回報率將反映這種對現金增長的使用。在後一種情況下，增長所需的債務將提高回報，但不會影響股東權益。通過這種方式，儘管企業的核心經濟保持不變，但債務的使用將提高投資回報率。
Combining Wanhua Chemical Group's Debt And Its 19% Return On Equity
合併萬華化學集團的債務及其19％的股本回報率
It's worth noting the high use of debt by Wanhua Chemical Group, leading to its debt to equity ratio of 1.10. While its ROE is respectable, it is worth keeping in mind that there is usually a limit as to how much debt a company can use. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.
值得注意的是，萬華化學集團大量使用債務，導致其負債權益比率爲1.10。儘管其投資回報率可觀，但值得記住的是，公司可以使用多少債務通常是有限制的。債務確實會帶來額外的風險，因此只有當公司從中獲得可觀的回報時，債務才是真正值得的。
Summary
摘要
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have the same ROE, then I would generally prefer the one with less debt.
股本回報率是衡量企業創造利潤並將其返還給股東的能力的有用指標。能夠在不負債過多的情況下獲得高股本回報的公司通常質量很好。如果兩家公司的投資回報率相同，那麼我通常更喜歡負債較少的公司。
Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to check this FREE visualization of analyst forecasts for the company.
話雖如此，儘管投資回報率是衡量業務質量的有用指標，但你必須考慮一系列因素才能確定購買股票的正確價格。重要的是要考慮其他因素，例如未來的利潤增長，以及未來需要多少投資。因此，您可能需要查看該公司的分析師預測的免費可視化效果。
But note: Wanhua Chemical Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
但請注意：萬華化學集團可能不是最好的買入股票。因此，來看看這份投資回報率高、債務低的有趣公司的免費清單。
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