Shenzhen Kaifa Technology (SZSE:000021) has seen a significant increase in its stock price by 51% over the past three months. The company’s Return on Equity (ROE) is at 7.9%, indicating that it is generating a profit of CN¥0.08 for each CN¥1 of shareholders’ capital. While the ROE may not seem attractive at first glance, it is higher than the industry average of 6.3%.
The company’s moderate 6.0% growth over the past five years can be attributed to factors such as high earnings retention and belonging to a high-growth industry. Shenzhen Kaifa Technology’s net income growth is also higher than the industry average of 3.9%. The company has a three-year median payout ratio of 30% and has been paying dividends for at least ten years, showing efficient use of its profits.
Investors may want to consider the company’s expected earnings growth and its P/E ratio to determine if the stock is undervalued or overvalued. Overall, Shenzhen Kaifa Technology’s performance is impressive, especially with significant earnings growth backed by a respectable ROE and high reinvestment rate. However, investors should also be aware of potential risks that the company may face in the future.
For more information on the risks associated with Shenzhen Kaifa Technology, investors can visit the risk dashboard for free on the platform. Simply Wall St provides unbiased analysis based on historical data and analyst forecasts, and readers are advised to conduct their own research before making investment decisions.
Source
Photo credit simplywall.st
