Returns On Capital Are Showing Encouraging Signs At China Automotive Systems (NASDAQ:CAAS)

Simply Wall St.09-28

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics. Typically, we'll want to notice a trend of growing return on...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2470004759?lang=en_US&edition=fundamental","thumbnail":"https://images.simplywall.st/asset/industry/4012000-choice1-main-header/1585186661661","is_english":true,"pubTime":"2024-09-28 20:59","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2470004759","market":"us","top_or_hot":-1,"title":"Returns On Capital Are Showing Encouraging Signs At China Automotive Systems (NASDAQ:CAAS)","media":"Simply Wall St.","content":"<div>\n<p>Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics.  Typically, we'll want to notice a trend of growing return on...</p>\n\n<a href=\"https://simplywall.st/stocks/us/automobiles/nasdaq-caas/china-automotive-systems/news/returns-on-capital-are-showing-encouraging-signs-at-china-au\">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>Returns On Capital Are Showing Encouraging Signs At China Automotive Systems (NASDAQ:CAAS)</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\">\nReturns On Capital Are Showing Encouraging Signs At China Automotive Systems (NASDAQ:CAAS)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-28 20:59 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/automobiles/nasdaq-caas/china-automotive-systems/news/returns-on-capital-are-showing-encouraging-signs-at-china-au><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics.  Typically, we'll want to notice a trend of growing return on...</p>\n\n<a href=\"https://simplywall.st/stocks/us/automobiles/nasdaq-caas/china-automotive-systems/news/returns-on-capital-are-showing-encouraging-signs-at-china-au\">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":"BK4112","symbol_name":"金融交易所和数据","start_time":0,"source_url":"https://simplywall.st/stocks/us/automobiles/nasdaq-caas/china-automotive-systems/news/returns-on-capital-are-showing-encouraging-signs-at-china-au","article_id":"2470004759","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/4012000-choice1-main-header/1585186661661"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2470004759","pubTimestamp":1727528348,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4112":"金融交易所和数据","NDAQ":"纳斯达克OMX交易所","TQQQ":"纳指三倍做多ETF","EBIT":"Harbor AlphaEdge Small Cap Earners ETF","BK4585":"ETF&股票定投概念","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","QID":"纳指两倍做空ETF","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","BK4124":"机动车零配件与设备","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","BK4588":"碎股","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","SQQQ":"纳指三倍做空ETF","CAAS":"中汽系统","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","QLD":"纳指两倍做多ETF",".IXIC":"NASDAQ Composite","PSQ":"纳指反向ETF"},"translate_title":"中国汽车系统（纳斯达克股票代码：CAAS）的资本回报率显示出令人鼓舞的迹象","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CAAS":1,"EBIT":1,"NDAQ":1,".IXIC":1,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key financial metrics.  Typically, we'll want to notice a trend of growing return on capital employed (ROCE) and alongside that, an expanding 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.    With that in mind, we've noticed some promising trends at China Automotive Systems (NASDAQ:CAAS) so let's look a bit deeper.     Understanding Return On Capital Employed (ROCE)  Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business.  To calculate this metric for China Automotive Systems, this is the formula:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.11 = US$44m ÷ (US$785m - US$380m) (Based on the trailing twelve months to June 2024). Therefore, China Automotive Systems has an ROCE of 11%. By itself that's a normal return on capital and it's in line with the industry's average returns of 11%.   See our latest analysis for China Automotive Systems NasdaqCM:CAAS Return on Capital Employed September 28th 2024 Historical performance is a great place to start when researching a stock so above you can see the gauge for China Automotive Systems' ROCE against it's prior returns.  If you're interested in investigating China Automotive Systems' past further, check out this free graph covering China Automotive Systems' past earnings, revenue and cash flow.  So How Is China Automotive Systems' ROCE Trending?  Shareholders will be relieved that China Automotive Systems has broken into profitability.  While the business was unprofitable in the past, it's now turned things around and is earning 11% on its capital.  While returns have increased, the amount of capital employed by China Automotive Systems has remained flat over the period.  With no noticeable increase in capital employed, it's worth knowing what the company plans on doing going forward in regards to reinvesting and growing the business.  Because in the end, a business can only get so efficient.     On a separate but related note, it's important to know that China Automotive Systems has a current liabilities to total assets ratio of 48%, which we'd consider pretty high.  This can bring about some risks because the company is basically operating with a rather large reliance on its suppliers or other sorts of short-term creditors.   Ideally we'd like to see this reduce as that would mean fewer obligations bearing risks.    Our Take On China Automotive Systems' ROCE  In summary, we're delighted to see that China Automotive Systems has been able to increase efficiencies and earn higher rates of return on the same amount of capital.       Since the stock has returned a staggering 143% to shareholders over the last  five years, it looks like investors are recognizing these changes.   Therefore, we think it would be worth your time to check if these trends are going to continue.    On the other side of ROCE, we have to consider valuation. That's why we have a FREE intrinsic value estimation for CAAS on our platform  that is definitely worth checking out.    If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity. New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave 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.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"dataReport","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2470004759"}