Always look beyond the rainbow
This is might seem perculiar but the reasons why it might be so be because
Profit margins: Sheng Siong might have higher profit margins compared to Alibaba and JD.com, which could contribute to a higher ROE. This can be due to factors like efficient cost management, pricing strategies, or lower competition in their respective markets.
Financial leverage: Companies with higher financial leverage (more debt relative to equity) can exhibit higher ROE because they use borrowed money to generate returns. If Sheng Siong has higher financial leverage compared to Alibaba and JD.com, that could partly explain the difference in ROE.
Growth strategies: Alibaba and JD.com may be investing more heavily in growth and expansion, which can lead to lower ROE in the short term. As they invest in new businesses, acquisitions, or technologies, these companies may see a temporary dip in profitability, which would impact their ROE.
Market saturation: Sheng Siong operates primarily in Singapore, which is a smaller, more mature market compared to the vast and rapidly growing markets served by Alibaba and JD.com. As a result, Sheng Siong might be able to generate higher returns with less growth-oriented investments, leading to a higher ROE.
Hence it is always important to consider the broad picture both in a stochastic and business nature
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Comments
[爱心] Nice