Return on Equity (ROE)
High ROE shows a company’s strong ability to make money with shareholders’ capital — but it’s not the only criterion
📌 Concept Analysis
ROE = how much profit a company generates using shareholders’ net assets — an important reference metric for measuring business model quality, but not a sufficient condition for screening companies.
You open a shop with 100,000 yuan capital and earn 20,000 in a year — that’s 20% ROE. Your neighbor also opens a shop with 100,000 yuan and earns 5,000 — that’s 5% ROE. In terms of earning efficiency, your shop is clearly better. But if your shop was built on heavy borrowing, then this 20% is not so reliable — once you can’t repay debts, the shop collapses. So ROE must be considered alongside debt levels.
💡 Core Understanding
1. Companies with high ROE generally have better business models — this is the most important reference value of ROE.
ROE reflects how efficiently a company uses shareholders’ capital to generate profits. High ROE often means the company has a stronger moat and better business model. Duan Yongping said he also likes the ROE metric and further pointed out that one should actually look at ROA (Return on Assets), because ROE seems to exclude debt.
2. ROE is meaningful only without debt leverage — high ROE propped up by leverage is dangerous.
Duan Yongping especially emphasized that ROE must exclude the effect of debt leverage; otherwise you may be misled. General Motors’ “return on equity” before bankruptcy is a typical counterexample — high ROE doesn’t equal a good company; you need to see how that number came about.
3. ROE is a way of thinking, not a screening metric — don’t mechanically select stocks by ROE.
ROE or ROA is helpful when understanding a company’s business model, but they’re not sufficient conditions. Non-numerical things — corporate culture, management, moat — are often more important than current numbers.
4. The key remains whether you can understand the company’s future cash flow — ROE is just an auxiliary tool.
Growth companies may have very low ROE in early stages, but that doesn’t mean they’re bad companies. Duan Yongping himself said he bought Skyworth “without looking at ROE” because he judged the long-term logic of the color TV market, not current financial metrics.
🛠 How to Practice
When looking at a company’s ROE, ask yourself three questions:
- Is this ROE propped up by debt? First check the debt-to-asset ratio — high ROE under high debt is unreliable. Duan Yongping prefers looking at ROA because it excludes leverage effects.
- Is ROE consistently stable? One year of high ROE means nothing — look at 5–10 years of ROE trends to judge whether the moat truly exists.
- Is low ROE because the company is poor or in a growth phase? Growth companies invest heavily early on, resulting in very low ROE — at such times look at the logic of discounted future cash flow, not current ROE.
⚠️ Common Pitfalls
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❌ “High ROE means good company; just buy directly” — “Do you know what GM’s ‘return on equity’ was before bankruptcy?” High ROE may be propped up by high leverage and collapse when the economy downturns. ROE is merely an auxiliary tool for understanding business models; it cannot replace overall judgment of a company. (Source: Investment Logic Chapter)
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❌ “Companies with low ROE aren’t worth investing in” — “Growth companies may have very low return on equity in their early stage.” When Duan Yongping bought Netease, Netease’s financial metrics didn’t look good, but he looked at long-term discounted future cash flow, not current ROE. (Source: Investment Logic Chapter, 2011-02-13)
💬 Original Quotes
“I also like the ROE metric. Generally speaking, companies with high ROE have good business models. Actually what I want to say is ROA, because ROE doesn’t seem to include debt?” — Duan Yongping (Source: Investment Logic Chapter, 2019-06-01)
“Without loans, companies with high return on equity are certainly good, indicating strong profitability. Companies with low return on equity generally aren’t great, but growth companies may have very low return on equity in their early stages. The key is still whether you can understand the company’s future (cash flow).” — Duan Yongping (Source: Investment Logic Chapter, 2011-02-13)
“ROE is not a screening metric — like intrinsic value, ROE is a way of thinking. ROE or ROA is helpful when understanding a company’s business model, but not a sufficient condition.” — Duan Yongping (Source: Investment Logic Chapter, 2019-06-02)
🔗 Related Nodes
Upstream Concepts (prerequisites for understanding this concept): 生意模式 · 护城河 · 内在价值
Downstream Concepts (conclusions derived from this): 好公司的标准 · 未来现金流折现 · 分红与回购
Related Company Cases 苹果 (typical high-ROE case) · 网易 (early ROE wasn’t high but long-term value immense) · 创维 (Duan Yongping bought without looking at ROE)
ROE（净资产收益率）
ROE高说明公司用股东的钱赚钱的能力强——但不是唯一标准
📌 概念解析
ROE = 公司用股东的净资产赚了多少钱，是衡量生意模式好坏的重要参考指标，但不是筛选公司的充分条件。
你开了一家店，投入了10万块本金，一年赚了2万，ROE就是20%。你邻居也开了一家店，投入10万，一年赚了5000，ROE是5%。从赚钱效率来看，你的店明显更好。但如果你的店是靠借了很多钱撑起来的，那这个20%就没那么可靠了——一旦还不上债，店就垮了。所以ROE要结合负债情况来看。
💡 核心理解
1. ROE高的公司，生意模式一般更好——这是ROE最重要的参考价值。
ROE反映的是公司用股东资金创造利润的效率，高ROE往往意味着公司有更强的护城河和更好的生意模式。段永平说自己也喜欢ROE这个指标，并进一步指出实际上更应看的是ROA，因为ROE好像没包括负债。
2. ROE必须在无负债前提下才有意义——靠杠杆堆出来的高ROE是危险的。
段永平特别强调，ROE要排除负债杠杆的影响，否则可能被误导。通用汽车（GM）破产前的”净资产收益率”就是典型反例——高ROE不等于好公司，还要看这个数字是怎么来的。
3. ROE是思维方式，不是筛选指标——不能用ROE机械地选股。
ROE或ROA在了解一个公司的生意模式时是有帮助的，但不是充分条件。非数字的东西——企业文化、管理层、护城河——往往比眼前的数字更重要。
4. 关键还是看能不能看懂公司的未来现金流——ROE只是辅助工具。
成长型公司初期ROE可能很低，但这不代表公司不好。段永平自己说”没看过ROE”就买了创维，因为他判断的是彩电市场的长期逻辑，而不是当期财务指标。
🛠 如何实践
看一家公司的ROE时，问自己三个问题：
- 这个ROE是靠负债堆出来的吗？ 先看资产负债率，高负债下的高ROE不可靠。段永平更倾向于看ROA（总资产回报率），因为它排除了杠杆影响。
- ROE是否持续稳定？ 一年的高ROE没有意义，看5-10年的ROE趋势，才能判断护城河是否真实存在。
- ROE低是因为公司差，还是因为处于成长期？ 成长型公司初期大量投入，ROE会很低——这时候要看的是未来现金流折现的逻辑，而不是当期ROE。
⚠️ 常见误区
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❌ “ROE高就是好公司，可以直接买” — “你知道GM破产前的’净资产收益率’是多少吗？“高ROE可能是靠高杠杆堆出来的，一旦经济下行就会崩塌。ROE只是了解生意模式的辅助工具，不能替代对公司整体的判断。（来源：投资逻辑篇）
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❌ “ROE低的公司不值得投” — “成长型公司的初期可能净资产收益率会很低。“段永平买网易时，网易的财务指标并不好看，但他看的是长期的未来现金流折现，而不是当期ROE。（来源：投资逻辑篇，2011-02-13）
💬 原文金句
“我也喜欢ROE这个指标。一般来说，ROE高的公司商业模式好。其实我想说的是ROA，因为ROE好像没包括债务？” — 段永平（来源：投资逻辑篇，2019-06-01）
“在没有贷款的前提下，净资产收益率高的公司当然是不错的，说明公司的盈利能力强。净资产收益率低的公司一般都不太好，但成长型公司的初期可能净资产收益率会很低。关键还是看你能不能看懂公司的未来（现金流）。” — 段永平（来源：投资逻辑篇，2011-02-13）
“ROE不是一个筛选指标，和内在价值一样，ROE是一个思维方式。ROE或ROA在了解一个公司的生意模式时是有帮助的，但不是充分条件。” — 段永平（来源：投资逻辑篇，2019-06-02）
🔗 关联节点
上游概念（理解这个概念的前提）： 生意模式 · 护城河 · 内在价值
下游概念（由此推导出的结论）： 好公司的标准 · 未来现金流折现 · 分红与回购