#以书之名#
To answer these questions, first of all, it is necessary to figure out what are the factors that affect the change of ROE at this stage.
According to the DuPont analysis, the breakdown is as follows:
Net profit margin - the overall upward trend, declining in 2017;
Equity multiplier – significantly higher in 2013 than in 2012 and stable since then;
Total asset turnover ratio - the change is large, it increased before 2015, and decreased significantly in 2015 and 2016
Then, let's sort it out one by one, let's look at the first question, why did ROE increase significantly in 2013 and 2014?
In 2013, Midea Group exchanged shares to absorb and merge Midea Electric Appliances to achieve overall listing.
In September 2013, Midea Group issued shares to all other shareholders of Midea in exchange for their shares in Midea
The issue price of Midea Group for share exchange and absorption is: 44.56 yuan per share. The exchange price of Midea Electric Appliances is: 15.96 yuan / share, which is 68.71% higher than the average trading price of Midea Electric shares of 9.46 yuan / share in the 20 trading days before the pricing benchmark date (Midea Electric suspension date)
After the merger by share exchange, the legal personality of Midea Electric was cancelled, and Midea Group, as the surviving company, inherited and undertook all the assets, liabilities, business, personnel, contracts and all other rights and obligations of Midea Electric Appliances
There are two key words in this reorganization: "integration" and "solving intra-industry competition".
Midea will share industrial chain resources such as major appliances (ice washing and emptying), small household appliances (microwave ovens, rice cookers, induction cookers, etc.), motors, and logistics in terms of branding, procurement, technology, and management
Further enhance the synergistic effect, reduce related party transactions, avoid intra-industry competition, and realize the all-round synergy of the home appliance industry in the vertical and horizontal, front, middle and back end and channels
Therefore, the group was listed as a whole, and the net profit margin, equity multiplier, and total asset turnover ratio were 22.55%, 3.92, and 1.31 respectively, which were higher than the 16.53%, 2.86, and 1.13 of Midea Electric in 2012, so the ROE increased.
Then, the second question is, why did ROE decline slightly after 2015, from about 30% to 25%?
In 2015 and 2016, its book money funds were 17.196 billion yuan and 48.274 billion yuan respectively, and other current assets (wealth management products) were 43.530 billion yuan and 46.847 billion yuan respectively
Due to the decline in the turnover rate of monetary funds and other liquid assets, the overall asset turnover rate has been lowered, in short: too much money.
Previously, when we were researching Little Swan, we also encountered the same situation, and even because of the distress of too much money, it also deliberately changed its business scope and added a business of "investing in the financial industry with its own funds".
At the same time, the inventory turnover rate and accounts receivable turnover rate are also rising, which can also be seen through the cash flow statement, from 2013 to 2016, the net present ratio reached 1.21, 2.13, 1.96 and 1.68 respectively
At this stage, from a business point of view, why can we achieve the characteristics of high turnover and fast payment collection?
Predict the follow-up and listen to the next breakdown
It does not constitute any investment advice, the stock market is risky, and you need to be cautious when entering the market