China Resources Building Materials Technology Holdings (HKG:1313) May Have Issues Allocating Its Capital

Simply Wall St.11-25

To find a multi-bagger stock, what are the underlying trends we should look for in a business? One common approach is to try and find a company with returns on capital employed (ROCE) that are ...

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One common approach is to try and find a company with returns on capital employed (ROCE) that are ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/materials/hkg-1313/china-resources-building-materials-technology-holdings-shares/news/china-resources-building-materials-technology-holdings-hkg13-5\">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>China Resources Building Materials Technology Holdings (HKG:1313) May Have Issues Allocating Its Capital</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\">\nChina Resources Building Materials Technology Holdings (HKG:1313) May Have Issues Allocating Its Capital\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-25 08:47 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/materials/hkg-1313/china-resources-building-materials-technology-holdings-shares/news/china-resources-building-materials-technology-holdings-hkg13-5><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>To find a multi-bagger stock, what are the underlying trends we should look for in a business?  One common approach is to try and find a company with returns on capital employed (ROCE) that are ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/materials/hkg-1313/china-resources-building-materials-technology-holdings-shares/news/china-resources-building-materials-technology-holdings-hkg13-5\">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":"BK4588","symbol_name":"碎股","start_time":0,"source_url":"https://simplywall.st/stocks/hk/materials/hkg-1313/china-resources-building-materials-technology-holdings-shares/news/china-resources-building-materials-technology-holdings-hkg13-5","article_id":"2486044722","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/2031000-choice1-main-header/1585186745257"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2486044722","pubTimestamp":1732495654,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"To find a multi-bagger stock, what are the underlying trends we should look for in a business? One common approach is...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4588":"碎股","BK1563":"建材水泥股","BK1570":"华润系","EBIT":"Harbor AlphaEdge Small Cap Earners ETF","BK1507":"粤港澳大湾区","BK1135":"建筑材料","BK4544":"ARK ETF合集","ARKG":"ARK Genomic Revolution ETF","01313":"华润建材科技","BK1589":"北水核心资产","BK1594":"碳中和概念股","BK4585":"ETF&股票定投概念"},"translate_title":"华润建材科技控股（HKG：1313）在分配资本时可能存在问题","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"01313":1,"ARKG":1,"EBIT":1},"content_text":"To find a multi-bagger stock, what are the underlying trends we should look for in a business?  One common approach is to try and find a company with returns on capital employed (ROCE) that are increasing, in conjunction with a growing amount 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.    In light of that, when we looked at China Resources Building Materials Technology Holdings (HKG:1313) and its ROCE trend, we weren't exactly thrilled.     What Is Return On Capital Employed (ROCE)?  For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.  To calculate this metric for China Resources Building Materials Technology Holdings, this is the formula:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.01 = CN¥583m ÷ (CN¥73b - CN¥16b) (Based on the trailing twelve months to September 2024). So, China Resources Building Materials Technology Holdings has an ROCE of 1.0%.  Ultimately, that's a low return and it under-performs the Basic Materials industry average of 2.4%.   Check out our latest analysis for China Resources Building Materials Technology Holdings SEHK:1313 Return on Capital Employed November 25th 2024 Above you can see how the current ROCE for China Resources Building Materials Technology Holdings compares to its prior returns on capital, but there's only so much you can tell from the past.  If you'd like, you can  check out the forecasts from the analysts covering China Resources Building Materials Technology Holdings  for free.  The Trend Of ROCE  On the surface, the trend of ROCE at China Resources Building Materials Technology Holdings doesn't inspire confidence.   To be more specific, ROCE has fallen from 21% over the last five years.    On the other hand, the company has been employing more capital without a corresponding improvement in sales in the last year, which could suggest these investments are longer term plays.  It's worth keeping an eye on the company's earnings from here on to see if these investments do end up contributing to the bottom line.    The Bottom Line On China Resources Building Materials Technology Holdings' ROCE  In summary, China Resources Building Materials Technology Holdings is reinvesting funds back into the business for growth but unfortunately it looks like sales haven't increased much just yet.        Moreover, since the stock has crumbled 75% over the last  five years, it appears investors are expecting the worst.   On the whole, we aren't too inspired by the underlying trends and we think there may be better chances of finding a multi-bagger elsewhere.     If you'd like to know about the risks facing China Resources Building Materials Technology Holdings, we've discovered 2 warning signs that you should be aware of.    While China Resources Building Materials Technology Holdings may not currently earn the highest returns, we've compiled a list of companies that currently earn more than 25% return on equity. Check out this free list here. 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":"","news_rank":0,"symbols":[],"gpt_button":1},"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/2486044722"}