ROE≠投资收益率，为何还要重视ROE？

Core Viewpoint - The article argues that the relationship between Return on Equity (ROE) and investment returns is not as straightforward as often perceived, emphasizing the importance of understanding the nuances of ROE in evaluating companies [3][10]. Group 1: ROE and Net Profit Growth Rate - ROE is defined as net profit divided by shareholder equity, and if a company does not pay dividends, a long-term ROE of 20% implies a net profit annual growth rate of 20% [5]. - In cases where companies distribute dividends, long-term ROE can exceed net profit growth rate, especially if a company pays out 100% of its profits [5]. Group 2: Understanding ROE and Investment Returns - For a company like Kweichow Moutai with a PE ratio of 20 and a dividend yield of 5%, if net profit growth is 0%, the long-term ROE remains at 36%, but investment returns will not exceed 5% [7]. - If net profit growth is 10%, the investment return can be 15%, indicating that investment returns do not necessarily correlate with ROE [8]. Group 3: Importance of ROE - High historical ROE indicates strong past profitability and potential for future growth, suggesting that companies with a history of high ROE are likely to remain strong performers [10]. - The correct use of ROE is to filter for quality companies and analyze their profitability logic rather than using it solely for valuation and return calculations [11]. Group 4: Insights - Long-term returns are derived from initial dividend yield plus long-term growth rate, emphasizing the importance of company quality for stable dividends and growth [13]. - The focus should be on long-term performance, as short-term factors can significantly impact company performance and valuation [14]. - Emphasizing long-term growth is crucial, as it is the primary source of returns, with low growth leading to low returns [16]. - Safety margins are important, as future growth rates are uncertain, while current dividends are more predictable [16]. - The significance of dividend reinvestment is highlighted, as a high initial yield can still provide meaningful returns even with zero growth [16]. - The article advises against unrealistic expectations of rapid wealth accumulation, noting that consistently high growth companies are rare [16]. - A good investment idea held for a long time can yield substantial returns, and frequent trading may lead to missed opportunities [16].