JA Solar Technology (SZSE:002459) may not be the multi-bagger investment opportunity investors are looking for. The company’s Return on Capital Employed (ROCE) is currently at 0.1%, significantly lower than the Semiconductor industry average of 4.8%. This indicates that the company is not generating high returns on the capital invested in its business.
Over the past five years, JA Solar Technology has seen a decline in its ROCE from 14% to 0.1%, despite an increase in the amount of capital employed. This suggests that the company’s investments may not be translating into higher earnings. Additionally, the company’s high level of current liabilities as a percentage of total assets could pose risks to its operations.
Investors may be hopeful for better performance in the future, as the stock has delivered a 220% gain over the past five years. However, without positive trends in ROCE and earnings, it may be prudent to exercise caution when considering investing in JA Solar Technology.
Analysts recommend keeping an eye on the company’s performance and future prospects. Investors interested in solid companies with high returns on equity may want to explore other options. Additionally, it is important to note that this article is general in nature and not intended as financial advice.
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