Is Powerwin Tech Group Limited's (HKG:2405) ROE Of 18% Impressive?

Simply Wall St.12-14

While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. To keep the lesson...

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To keep the lesson...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/media/hkg-2405/powerwin-tech-group-shares/news/is-powerwin-tech-group-limiteds-hkg2405-roe-of-18-impressive\">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>Is Powerwin Tech Group Limited's (HKG:2405) ROE Of 18% Impressive?</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\">\nIs Powerwin Tech Group Limited's (HKG:2405) ROE Of 18% Impressive?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-14 06:07 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/media/hkg-2405/powerwin-tech-group-shares/news/is-powerwin-tech-group-limiteds-hkg2405-roe-of-18-impressive><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important.  To keep the lesson...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/media/hkg-2405/powerwin-tech-group-shares/news/is-powerwin-tech-group-limiteds-hkg2405-roe-of-18-impressive\">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":"02405","symbol_name":"力盟科技","start_time":0,"source_url":"https://simplywall.st/stocks/hk/media/hkg-2405/powerwin-tech-group-shares/news/is-powerwin-tech-group-limiteds-hkg2405-roe-of-18-impressive","article_id":"2491268582","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/4311000-choice2-main-header/1585186819541"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2491268582","pubTimestamp":1734127654,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"While some investors are already well versed in financial metrics (hat tip), this article is for those who would like...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"02405":"力盟科技","ROE":"ASTORIA US QUALITY KINGS ETF","BK1137":"广告"},"translate_title":"Powerwin Tech Group Limited(HKG：2405)18%的ROE令人印象深刻吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"02405":1,"ROE":1},"content_text":"While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important.  To keep the lesson grounded in practicality, we'll use ROE to better understand Powerwin Tech Group Limited (HKG:2405).  ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders.  Put another way, it reveals the company's success at turning shareholder investments into profits.  See our latest analysis for Powerwin Tech Group  How To Calculate Return On Equity?  Return on equity 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 Powerwin Tech Group is:18% = US$5.5m ÷ US$30m (Based on the trailing twelve months to June 2024). The 'return' is the profit over the last twelve months.  So, this means that for every HK$1 of its shareholder's investments, the company generates a profit of HK$0.18.   Does Powerwin Tech Group Have A Good Return On Equity?  By comparing a company's ROE with its industry average, we can get a quick measure of how good it is.  However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification.   Pleasingly, Powerwin Tech Group has a superior ROE than the average (9.1%) in the Media industry. SEHK:2405 Return on Equity December 13th 2024 That is a good sign.    However, bear in mind that a high ROE doesn’t necessarily indicate efficient profit generation.  A higher proportion of debt in a company's capital structure may also result in a high ROE, where the high debt levels could be a huge risk .   To know the 3 risks we have identified for Powerwin Tech Group visit our risks dashboard for free.  Why You Should Consider Debt When Looking At ROE  Virtually all companies need money to invest in the business, to grow profits.  That cash can come from retained earnings, issuing new shares (equity), or debt.  In the first and second cases, the ROE will reflect this use of cash for investment in the business.  In the latter case, the debt used for growth will improve returns, but won't affect the total equity.  In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.  Powerwin Tech Group's Debt And Its 18% ROE  We think Powerwin Tech Group uses a significant amount of debt to maximize its returns, as it has a significantly higher debt to equity ratio of 3.32.   Its ROE is decent, but once I consider all the debt, I'm not really impressed.      Summary    Return on equity is one way we can compare its business quality of different companies.  Companies that can achieve high returns on equity without too much debt are generally of good quality.  All else being equal, a higher ROE is better.  Having said that, while ROE is a useful indicator of business quality, you'll have to look at a whole range of factors to determine the right price to buy a stock.  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.   You can see how the company has grow in the past by looking at this FREE detailed graph of past earnings, revenue and cash flow.  Of course Powerwin Tech Group may not be the best stock to buy. So you may wish to see this free collection of other companies that have high ROE and low debt. New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio 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":"0","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/2491268582"}