Should You Be Excited About ZJLD Group Inc's (HKG:6979) 18% Return On Equity?

Simply Wall St.07-28

Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE). By way of ...

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By way of ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/food-beverage-tobacco/hkg-6979/zjld-group-shares/news/should-you-be-excited-about-zjld-group-incs-hkg6979-18-retur\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Should You Be Excited About ZJLD Group Inc's (HKG:6979) 18% Return On Equity?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nShould You Be Excited About ZJLD Group Inc's (HKG:6979) 18% Return On Equity?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-28 08:29 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/food-beverage-tobacco/hkg-6979/zjld-group-shares/news/should-you-be-excited-about-zjld-group-incs-hkg6979-18-retur><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is for those who would like to learn about Return On Equity (ROE).  By way of ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/food-beverage-tobacco/hkg-6979/zjld-group-shares/news/should-you-be-excited-about-zjld-group-incs-hkg6979-18-retur\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4215","symbol_name":"住宅房地产投资信托","start_time":0,"source_url":"https://simplywall.st/stocks/hk/food-beverage-tobacco/hkg-6979/zjld-group-shares/news/should-you-be-excited-about-zjld-group-incs-hkg6979-18-retur","article_id":"2454517515","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/5112000-choice2-main-header/1585186740038"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2454517515","pubTimestamp":1722126562,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Many investors are still learning about the various metrics that can be useful when analysing a stock. 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View our latest analysis for ZJLD Group  How To Calculate Return On Equity?  The formula for return on equity is:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for ZJLD Group is:18% = CN¥2.3b ÷ CN¥13b (Based on the trailing twelve months to December 2023). The 'return' is the profit over the last twelve months.  One way to conceptualize this is that for each HK$1 of shareholders' capital it has, the company made HK$0.18 in profit.   Does ZJLD Group Have A Good ROE?  Arguably the easiest way to assess company's ROE is to compare it with the average in its industry.  The limitation of this approach is that some companies are quite different from others, even within the same industry classification.   Pleasingly, ZJLD Group has a superior ROE than the average (14%) in the Beverage industry. SEHK:6979 Return on Equity July 28th 2024 That's what we like to see.    However, bear in mind that a high ROE doesn’t necessarily indicate efficient profit generation.  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 ZJLD Group.    How Does Debt Impact ROE?  Companies usually need to invest money to grow their profits.  That cash can come from issuing shares, retained earnings, or debt.  In the first two cases, the ROE will capture this use of capital to grow.  In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity.  That will make the ROE look better than if no debt was used.  Combining ZJLD Group's Debt And Its 18% Return On Equity  ZJLD Group has a debt to equity ratio of just 0.0029, which is very low.    Its very respectable ROE, combined with only modest debt, suggests the business is in good shape.   Conservative use of debt to boost returns is usually a good move for shareholders, though it does leave the company more exposed to interest rate rises.     Summary    Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders.  In our books, the highest quality companies have high return on equity, despite low debt.  All else being equal, a higher ROE is better.  But when a business is high quality, the market often bids it up to a price that reflects this.  The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too.   So you might want to check this FREE visualization of analyst forecasts for the company.  If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt. Valuation is complex, but we're here to simplify it.Discover if ZJLD Group might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave 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.Have feedback on this article? Concerned about the content? Get in touch with us directly. 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