上海各区新茶工作室：Amlogic (Shanghai) Co.,Ltd.❼(SHSE：688099) Stock❼On An Uptrend： Are Strong Financials Guiding The Market？

Amlogic (Shanghai)Ltd❼(SHSE:688099) stock is up by a considerable 22% over the past three months. Given that the market rewards strong financials in the long-term, we wonder if that is the case in this instance. In this article, we decided to focus on ROE.

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. Put another way, it reveals the company❼success at turning shareholder investments into profits.

ROE can be calculated by using the formula:上海各区新茶工作室

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders✩quity爱上海龙凤419

So, based on the above formula, the ROE for Amlogic (Shanghai)Ltd is:

13% = CN¥779m ÷ CN¥6.2b (Based on the trailing twelve months to September 2024).爱上海同城论坛

The ❻turn✩s the amount earned after tax over the last twelve months. That means that for every CN¥1 worth of shareholders✩quity, the company generated CN¥0.13 in profit.上海新茶工作室微信

We have already established that ROE serves as an efficient profit-generating gauge for a company❼future earnings. 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 don❽have the same features.

To start with, Amlogic (Shanghai)Ltd❼ROE looks acceptable爱上海419论坛. Further, the company❼ROE compares quite favorably to the industry average of 6.8%上海娱乐网. This probably laid the ground for Amlogic (Shanghai)Ltd❼significant 25% net income growth seen over the past five years. However, there could also be other causes behind this growth. Such as - high earnings retention or an efficient management in place.

As a next step, we compared Amlogic (Shanghai)Ltd❼net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 14%.上海新茶工作室

Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. 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 , relative to its industry.

Amlogic (Shanghai)Ltd❼three-year median payout ratio is a pretty moderate 35%, meaning the company retains 65% of its income. This suggests that its dividend is well covered, and given the high growth we discussed above, it looks like Amlogic (Shanghai)Ltd is reinvesting its earnings efficiently.

Additionally, Amlogic (Shanghai)Ltd has paid dividends over a period of five years which means that the company is pretty serious about sharing its profits with shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 41%. Regardless, the future ROE for Amlogic (Shanghai)Ltd is predicted to rise to 17% despite there being not much change expected in its payout ratio.