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ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Red Avenue New Materials Group Co's annualizedNet Income for the quarter that ended in Mar. 2026 was ¥729 Mil.
Red Avenue New Materials Group Co's average Total Assets over the quarter that ended in Mar. 2026 was ¥9,419 Mil. Therefore, Red Avenue New Materials Group Co's annualized ROA % for the quarter that ended in Mar. 2026 was 7.74%.
Red Avenue New Materials Group Co (SHSE:603650) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
Red Avenue New Materials Group Co ROA % Related Terms
Red Avenue New Materials Group Co ROA % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Specialty Chemicals subindustry, Red Avenue New Materials Group Co's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Red Avenue New Materials Group Co ROA % vs Chemicals Industry
For the Chemicals industry and Basic Materials sector, Red Avenue New Materials Group Co's ROA % distribution charts can be found below:
* The bar in red indicates where Red Avenue New Materials Group Co's ROA % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Mar. 2026) net income data.
ROA % is displayed in the 30-year financial page.
Red Avenue New Materials Group Co (SHSE:603650) has a ROA % of 7.74% as of Mar. 2026. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Red Avenue New Materials Group Co and its competitors. This is near median its historical median of 7.84. Over the past decade, Red Avenue New Materials Group Co's ROA % has ranged from 4.64 to 17.79. According to the industry distribution chart, Red Avenue New Materials Group Co ranks #437 out of 1615 companies in the Chemicals industry, placing it in the top 27.1%.
Is Red Avenue New Materials Group Co's ROA % too high?
Red Avenue New Materials Group Co's current ROA % of 7.74% is near median its 10-year median of 7.84. Over the past 10 years, this metric has ranged from a low of 4.64 to a high of 17.79. The Chemicals industry median ROA % is 3.03. Red Avenue New Materials Group Co's value of 7.74% is 155.4% above this industry median. Based on the distribution chart, Red Avenue New Materials Group Co ranks #437 out of 1615 companies in the Chemicals industry, which is above the industry midpoint. Overall, Red Avenue New Materials Group Co has a GF Score™ of 73/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Red Avenue New Materials Group Co's ROA % compare to LIN and SHW?
According to the Chemicals industry distribution chart, Red Avenue New Materials Group Co ranks #437 out of 1615 companies for ROA %. This puts Red Avenue New Materials Group Co in the upper half of its industry. The industry median ROA % is 3.03. Red Avenue New Materials Group Co's value of 7.74% is 155.4% above this benchmark. Historically, Red Avenue New Materials Group Co's own ROA % has ranged from 4.64 to 17.79 over the past decade. While the company's 10-year median is 7.84 vs. the industry median of 3.03, Red Avenue New Materials Group Co has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROA % for a Chemicals company?
The median ROA % among Chemicals companies is 3.03, based on 1,615 companies in the industry. Companies in the top quartile (top 25%) have a ROA % significantly above this median, while those in the bottom quartile fall well below. However, ROA % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Red Avenue New Materials Group Co's current ROA % of 7.74% is 155.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROA % mean?
A high ROA % can signal that a stock is expensive relative to its fundamentals. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Red Avenue New Materials Group Co and its competitors. For the Chemicals industry, the median ROA % is 3.03 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Red Avenue New Materials Group Co's current ROA % is 7.74%, which is near median its own 10-year median of 7.84. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Red Avenue New Materials Group Co stock overvalued right now?
Based on GuruFocus' analysis, Red Avenue New Materials Group Co (SHSE:603650) is currently considered Significantly Overvalued. The stock's GF Value™ is ¥39.94, compared to a current price of ¥65.53 — trading 64.1% above its estimated fair value. The current ROA % is 7.74%, which is near median its 10-year median of 7.84 and 155.4% above the Chemicals industry median of 3.03. Red Avenue New Materials Group Co's overall GF Score™ is 73/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROA % calculated?
ROA % is calculated from a company's financial statements. For Red Avenue New Materials Group Co (SHSE:603650), the current ROA % is 7.74% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Red Avenue New Materials Group Co (SHSE:603650) Overvalued in 2026?
Based on GuruFocus' analysis, Red Avenue New Materials Group Co stock appears to be overvalued.
The current stock price of ¥65.53 is trading 64.1% above its estimated GF Value™ of ¥39.94.
GuruFocus considers Red Avenue New Materials Group Co to be Significantly Overvalued.
Key valuation signals for SHSE:603650:
ROA %: 7.74% (near median its 10-year median of 7.84)
GF Value™: ¥39.94 vs. price of ¥65.53 (64.1% above fair value)
Industry Position: 155.4% above the Chemicals median (#437 of 1615)
No single metric tells the full story. See the SHSE:603650 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Red Avenue New Materials Group Co Ltd is a China-based company engages in the manufacture and sale of chemical products. The company produces rubber and plastic chemical additives and other products. The products manufactured by the company include polyethylene glycol, silica, alkylphenol disulfides, and cobalt neodecanoate. Its main products are phenolic resins for rubber, including tackifying resins, reinforcing resins and adhesive resins.
73GF Score
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