Are China Ruyi Holdings Limited's (HKG:136) Fundamentals Good Enough to Warrant Buying Given The Stock's Recent Weakness?

Simply Wall St.11-15

China Ruyi Holdings (HKG:136) has had a rough three months with its share price down 11%. However, the company's fundamentals look pretty decent, and long-term financials are usually aligned with ...

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However, the company's fundamentals look pretty decent, and long-term financials are usually aligned with ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/media/hkg-136/china-ruyi-holdings-shares/news/are-china-ruyi-holdings-limiteds-hkg136-fundamentals-good-en\">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>Are China Ruyi Holdings Limited's (HKG:136) Fundamentals Good Enough to Warrant Buying Given The Stock's Recent Weakness?</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\">\nAre China Ruyi Holdings Limited's (HKG:136) Fundamentals Good Enough to Warrant Buying Given The Stock's Recent Weakness?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-15 06:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/media/hkg-136/china-ruyi-holdings-shares/news/are-china-ruyi-holdings-limiteds-hkg136-fundamentals-good-en><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>China Ruyi Holdings (HKG:136) has had a rough three months with its share price down 11%.   However, the company's fundamentals look pretty decent, and long-term financials are usually aligned with ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/media/hkg-136/china-ruyi-holdings-shares/news/are-china-ruyi-holdings-limiteds-hkg136-fundamentals-good-en\">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":"BK1128","symbol_name":"电影和娱乐","start_time":0,"source_url":"https://simplywall.st/stocks/hk/media/hkg-136/china-ruyi-holdings-shares/news/are-china-ruyi-holdings-limiteds-hkg136-fundamentals-good-en","article_id":"2483367680","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/4422000-choice2-main-header/1585186866479"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2483367680","pubTimestamp":1731622113,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"China Ruyi Holdings (HKG:136) has had a rough three months with its share price down 11%. However, the company's...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK1128":"电影和娱乐","BK1590":"短视频概念股","BK1598":"恒大概念","BK1142":"互联网与直销零售","00136":"中国儒意","BK1516":"腾讯概念"},"translate_title":"鉴于中国如意控股有限公司（HKG：136）近期的疲软，其基本面是否足以值得买入？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"00136":1},"content_text":"China Ruyi Holdings (HKG:136) has had a rough three months with its share price down 11%.   However, the company's fundamentals look pretty decent, and long-term financials are usually aligned with future market price movements.     Specifically, we decided to study China Ruyi Holdings'  ROE in this article.    Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money.  Put another way, it reveals the company's success at turning shareholder investments into profits.  See our latest analysis for China Ruyi Holdings  How To Calculate Return On Equity?  ROE can be calculated by using the formula:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for China Ruyi Holdings is:6.7% = CN¥824m ÷ CN¥12b (Based on the trailing twelve months to June 2024). The 'return' is the amount earned after tax over the last twelve months.  Another way to think of that is that for every HK$1 worth of equity, the company was able to earn HK$0.07 in profit.   Why Is ROE Important For Earnings Growth?  Thus far, we have learned that ROE measures how efficiently a company is generating its profits.  We now need to evaluate how much profit the company reinvests or \"retains\" for future growth which then gives us an idea about the growth potential of the company.  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 don't have the same features.  China Ruyi Holdings' Earnings Growth And 6.7% ROE   On the face of it, China Ruyi Holdings' ROE is not much to talk about.   However, its ROE is similar to the industry average of 6.7%, so we won't completely dismiss the company.   Particularly, the exceptional 32% net income growth seen by China Ruyi Holdings over the past five years is pretty remarkable.  Considering the moderately low ROE, it is quite possible that there might be some other aspects that are positively influencing the company's earnings growth.  Such as - high earnings retention or an efficient management in place.     We then compared China Ruyi Holdings' net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 8.8% in the same 5-year period.   SEHK:136 Past Earnings Growth November 14th 2024 Earnings growth is a huge factor in stock valuation.  What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price.   This then helps them determine if the stock is placed for a bright or bleak future.    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 check if China Ruyi Holdings is trading on a high P/E or a low P/E, relative to its industry.    Is China Ruyi Holdings Making Efficient Use Of Its Profits?    China Ruyi Holdings doesn't pay any regular dividends to its shareholders, meaning that the company has been reinvesting all of its profits into the business. This is likely what's driving the high earnings growth number discussed above.     Summary    On the whole, we do feel that China Ruyi Holdings has some positive attributes.      Despite its low rate of return, the fact that the company reinvests a very high portion of its profits into its business, no doubt contributed to its high earnings growth.       With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down.     To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. 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. 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