Could The Market Be Wrong About Bosideng International Holdings Limited (HKG:3998) Given Its Attractive Financial Prospects?

Bosideng International Holdings (HKG:3998) has had a rough month with its share price down 6.1%. However, stock prices are usually driven by a company’s financial performance over the long term, which in this case looks quite promising. In this article, we decided to focus on Bosideng International Holdings' ROE. Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In short, ROE shows the profit each dollar generates with respect to its shareholder investments. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. How Is ROE Calculated? Return on equity can be calculated by using the formula: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Bosideng International Holdings is:22% = CN¥3.6b ÷ CN¥16b (Based on the trailing twelve months to September 2025). The 'return' is the profit over the last twelve months. Another way to think of that is that for every HK$1 worth of equity, the company was able to earn HK$0.22 in profit. See our latest analysis for Bosideng International Holdings What Has ROE Got To Do With Earnings Growth? So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics. Bosideng International Holdings' Earnings Growth And 22% ROE At first glance, Bosideng International Holdings seems to have a decent ROE. On comparing with the average industry ROE of 11% the company's ROE looks pretty remarkable. Probably as a result of this, Bosideng International Holdings was able to see a decent growth of 18% over the last five years. We then compared Bosideng International Holdings' net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 14% in the same 5-year period. SEHK:3998 Past Earnings Growth January 12th 2026 The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. Is 3998 fairly valued? This infographic on the company's intrinsic value has everything you need to know. Is Bosideng International Holdings Making Efficient Use Of Its Profits? While Bosideng International Holdings has a three-year median payout ratio of 80% (which means it retains 20% of profits), the company has still seen a fair bit of earnings growth in the past, meaning that its high payout ratio hasn't hampered its ability to grow. Moreover, Bosideng International Holdings is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years. Upon studying the latest analysts' consensus data, we found that the company is expected to keep paying out approximately 78% of its profits over the next three years. Accordingly, forecasts suggest that Bosideng International Holdings' future ROE will be 24% which is again, similar to the current ROE. Conclusion Overall, we are quite pleased with Bosideng International Holdings' performance. In particular, its high ROE is quite noteworthy and also the probable explanation behind its considerable earnings growth. Yet, the company is retaining a small portion of its profits. Which means that the company has been able to grow its earnings in spite of it, so that's not too bad. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.