China Merchants Return On Equity vs. Current Valuation
| 600036 Stock | 37.91 0.11 0.29% |
For China Merchants profitability analysis, we use financial ratios and fundamental drivers that measure the ability of China Merchants to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well China Merchants Bank utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between China Merchants's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of China Merchants Bank over time as well as its relative position and ranking within its peers.
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China Merchants Bank Current Valuation vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining China Merchants's current stock value. Our valuation model uses many indicators to compare China Merchants value to that of its competitors to determine the firm's financial worth. China Merchants Bank is number one stock in return on equity category among its peers. It also is the top company in current valuation category among its peers reporting about 3,340,595,579,540 of Current Valuation per Return On Equity. Comparative valuation analysis is a catch-all model that can be used if you cannot value China Merchants by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for China Merchants' Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.China Current Valuation vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
China Merchants |
| = | 0.13 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.
China Merchants |
| = | 450.65 B |
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
China Current Valuation vs Competition
China Merchants Bank is the top company in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Financials industry is presently estimated at about 499.33 Billion. China Merchants totals roughly 450.65 Billion in current valuation claiming about 90% of equities under Financials industry.
China Merchants Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in China Merchants, profitability is also one of the essential criteria for including it into their portfolios because, without profit, China Merchants will eventually generate negative long term returns. The profitability progress is the general direction of China Merchants' change in net profit over the period of time. It can combine multiple indicators of China Merchants, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Operating Income | 134.7 B | 95.5 B | |
| Income Before Tax | 176.6 B | 185.4 B | |
| Net Income Applicable To Common Shares | 133.8 B | 140.4 B | |
| Net Income | 146.6 B | 153.9 B | |
| Income Tax Expense | 31.4 B | 16.6 B | |
| Net Income From Continuing Ops | 148 B | 106.5 B | |
| Total Other Income Expense Net | -6.3 M | -6 M | |
| Net Interest Income | 214.7 B | 197.3 B | |
| Interest Income | 375.6 B | 327.9 B | |
| Change To Netincome | -6.3 B | -6 B |
China Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on China Merchants. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of China Merchants position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the China Merchants' important profitability drivers and their relationship over time.
Use China Merchants in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if China Merchants position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Merchants will appreciate offsetting losses from the drop in the long position's value.China Merchants Pair Trading
China Merchants Bank Pair Trading Analysis
The ability to find closely correlated positions to China Merchants could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace China Merchants when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back China Merchants - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling China Merchants Bank to buy it.
The correlation of China Merchants is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as China Merchants moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if China Merchants Bank moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for China Merchants can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your China Merchants position
In addition to having China Merchants in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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A collection of large United States defense contractors including companies involved in production or distribution of aircraft, ships, vehicles, weaponry, and electronic systems in cooperation with the government. The Military Industrial theme has 46 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Military Industrial Theme or any other thematic opportunities.
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Other Information on Investing in China Stock
To fully project China Merchants' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of China Merchants Bank at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include China Merchants' income statement, its balance sheet, and the statement of cash flows.