Returns On Capital Signal Difficult Times Ahead For Southern Packaging Group (SGX:BQP)

Simply Wall St.12-18

What financial metrics can indicate to us that a company is maturing or even in decline? Typically, we'll see the trend of both return on capital employed (ROCE) declining and this usually coincides ...

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/2492266319?lang=en_US&edition=fundamental","thumbnail":"https://images.simplywall.st/asset/industry/2042000-choice2-main-header/1585186851277","is_english":true,"pubTime":"2024-12-18 09:38","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2492266319","market":"sg","top_or_hot":-1,"title":"Returns On Capital Signal Difficult Times Ahead For Southern Packaging Group (SGX:BQP)","media":"Simply Wall St.","content":"<div>\n<p>What financial metrics can indicate to us that a company is maturing or even in decline?  Typically, we'll see the trend of both return on capital employed (ROCE) declining and this usually coincides ...</p>\n\n<a href=\"https://simplywall.st/stocks/sg/materials/sgx-bqp/southern-packaging-group-shares/news/returns-on-capital-signal-difficult-times-ahead-for-southern-3\">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 Signal Difficult Times Ahead For Southern Packaging Group (SGX:BQP)</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 Signal Difficult Times Ahead For Southern Packaging Group (SGX:BQP)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-12-18 09:38 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/sg/materials/sgx-bqp/southern-packaging-group-shares/news/returns-on-capital-signal-difficult-times-ahead-for-southern-3><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>What financial metrics can indicate to us that a company is maturing or even in decline?  Typically, we'll see the trend of both return on capital employed (ROCE) declining and this usually coincides ...</p>\n\n<a href=\"https://simplywall.st/stocks/sg/materials/sgx-bqp/southern-packaging-group-shares/news/returns-on-capital-signal-difficult-times-ahead-for-southern-3\">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":"IE00BMG7P819.SGD","symbol_name":"Legg Mason ClearBridge - Global Infrastructure Income A Mdis SGD-H Plus","start_time":0,"source_url":"https://simplywall.st/stocks/sg/materials/sgx-bqp/southern-packaging-group-shares/news/returns-on-capital-signal-difficult-times-ahead-for-southern-3","article_id":"2492266319","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/2042000-choice2-main-header/1585186851277"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2492266319","pubTimestamp":1734485913,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"What financial metrics can indicate to us that a company is maturing or even in decline? Typically, we'll see the trend...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00BMG7P819.SGD":"Legg Mason ClearBridge - Global Infrastructure Income A Mdis SGD-H Plus","IE00BMG7P926.USD":"Legg Mason ClearBridge - Global Infrastructure Income A Acc USD","IE00B29SXL02.USD":"FIRST SENTIER GLOBAL LISTED INFRASTRUCTURE \"I\" (USD) INC","IE00BMG7P694.USD":"Legg Mason ClearBridge - Global Infrastructure Income A Mdis USD Plus","LU1267930490.SGD":"TEMPLETON GLOBAL EQUITY INCOME \"AS\" (SGD) INC A","EBIT":"Harbor AlphaEdge Small Cap Earners ETF","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","LU0211327993.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (USD) ACC","IE00B29SXK94.USD":"FIRST SENTIER GLOBAL LISTED INFRASTRUCTURE \"I\" (USD) ACC","LU1718418525.SGD":"JPMorgan Investment Funds - Global Select Equity A (acc) SGD","BK6053":"纸材料包装","LU0211328371.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (MDIS) (USD)   INC","IE00BMG7P587.USD":"LEGG MASON CLEARBRIDGE GLOBAL INFRASTRUCTURE INCOM \"A\" (USD) INC","BQP.SI":"南方包装","BK4585":"ETF&股票定投概念","SO":"美国南方公司","LU0310799852.SGD":"FTIF - Templeton Global Equity Income A MDIS SGD","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","BK4081":"电力公用事业","BK4588":"碎股"},"translate_title":"资本回报率预示着南方包装集团（新交所股票代码：BQP）未来的困难时期","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SO":1,"BQP.SI":1,"EBIT":1},"content_text":"What financial metrics can indicate to us that a company is maturing or even in decline?  Typically, we'll see the trend of both return on capital employed (ROCE) declining and this usually coincides with a decreasing amount of capital employed.  This indicates the company is producing less profit from its investments and its total assets are decreasing.  So after glancing at the trends within Southern Packaging Group (SGX:BQP), we weren't too hopeful.   What Is 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.  Analysts use this formula to calculate it for Southern Packaging Group:  Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.0041 = CN¥2.4m ÷ (CN¥1.1b - CN¥557m) (Based on the trailing twelve months to June 2024). So, Southern Packaging Group has an ROCE of 0.4%.  In absolute terms, that's a low return and it also under-performs the Packaging industry average of 8.0%.   View our latest analysis for Southern Packaging Group SGX:BQP Return on Capital Employed December 18th 2024 Historical performance is a great place to start when researching a stock so above you can see the gauge for Southern Packaging Group's ROCE against it's prior returns.  If you're interested in investigating Southern Packaging Group's past further, check out this free graph covering Southern Packaging Group's past earnings, revenue and cash flow.  How Are Returns Trending?  We are a bit worried about the trend of returns on capital at Southern Packaging Group.  To be more specific, the ROCE was 0.9%  five years ago, but since then it has dropped noticeably.  On top of that, it's worth noting that the amount of capital employed within the business has remained relatively steady.  This combination can be indicative of a mature business that still has areas to deploy capital, but the returns received aren't as high due potentially to new competition or smaller margins.  If these trends continue, we wouldn't expect Southern Packaging Group to turn into a multi-bagger.     On a side note, Southern Packaging Group's current liabilities have increased over the last  five years to 49% of total assets, effectively distorting the ROCE to some degree.  If current liabilities hadn't increased as much as they did, the ROCE could actually be even lower.   And with current liabilities at these levels, suppliers or short-term creditors are effectively funding a large part of the business, which can introduce some risks.       The Key Takeaway  All in all, the lower returns from the same amount of capital employed aren't exactly signs of a compounding machine.     In spite of that, the stock has delivered a 20% return to shareholders who held over the last  five years.  Regardless, we don't like the trends as they are and if they persist, we think you might find better investments elsewhere.    Southern Packaging Group does have some risks, we noticed   4 warning signs  (and 3 which make us uncomfortable)  we think you should know about.    While Southern Packaging Group isn't earning the highest return, check out this free list of companies that are earning high returns on equity with solid balance sheets. 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":"-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/2492266319"}