China Renaissance Holdings (HKSE:01911) ROC % : 7.63% (As of Jun. 2023)

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What is China Renaissance Holdings ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. China Renaissance Holdings's annualized return on capital (ROC %) for the quarter that ended in Jun. 2023 was 7.63%.

As of today (2024-06-09), China Renaissance Holdings's WACC % is 6.63%. China Renaissance Holdings's ROC % is 2.99% (calculated using TTM income statement data). China Renaissance Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

China Renaissance Holdings ROC % Historical Data

The historical data trend for China Renaissance Holdings's ROC % can be seen below:

* 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.

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China Renaissance Holdings ROC % Chart

China Renaissance Holdings Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

ROC %

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26.05

10.39

6.96

15.71

China Renaissance Holdings Semi-Annual Data
	Dec15	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Jun23
ROC %	Get a 7-Day Free Trial									9.13	24.45	5.38	2.51	7.63

China Renaissance Holdings ROC % Calculation

China Renaissance Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	0 * ( 1 - 0% )	/	( (9922.364	+	6156.864)	/ 2 )
=	0	/	8039.614
=	0.00 %

where

	Invested Capital		(A: Dec. 2021 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	17343.559	-	3439.779	-	( 6914.99	-	max(0, 5457.887	-	9439.303	+	6914.99	))
=	9922.364

	Invested Capital		(A: Dec. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	14522.465	-	3187.501	-	( 6108.825	-	max(0, 4415.551	-	9593.651	+	6108.825	))
=	6156.864

China Renaissance Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2023 is calculated as:

	ROC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2022 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	328.614 * ( 1 - -64.08% )	/	( (7068.287	+	0)	/ 1 )
=	539.1898512	/	7068.287
=	7.63 %

where

	Invested Capital		(Q: Jun. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	16942.241	-	4032.626	-	( 6756.012	-	max(0, 5715.95	-	11557.278	+	6756.012	))
=	7068.287

	Invested Capital		(Q: Jun. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

Note: The Operating Income data used here is two times the semi-annual (Jun. 2023) data.

China Renaissance Holdings (HKSE:01911) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, China Renaissance Holdings's WACC % is 6.63%. China Renaissance Holdings's ROC % is 2.99% (calculated using TTM income statement data). China Renaissance Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of 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.

China Renaissance Holdings ROC % Related Terms

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China Renaissance Holdings (HKSE:01911) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Capital Markets » China Renaissance Holdings Ltd (HKSE:01911) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

CSCHF:USA

Address

No.2A Workers’ Stadium North Road, Pacific Century Place, Gate 1, Space 8, Chaoyang District, Beijing, CHN, 100027

Website

http://www.huaxing.com

China Renaissance Holdings Ltd is an investment banking and investment management company that combines private placement advisory, Merger and Acquisition advisory, securities underwriting, research, sales and trading, investment management, and other financial services. Its segments include Investment Banking, Investment Management, CR Securities, and Others. The company generates maximum revenue from the Investment Management segment.

Executives

Bao Fan
Fil Limited	2201 Interest of corporation controlled by you
Pandanus Associates Inc.	2201 Interest of corporation controlled by you
Pandanus Partners L.p.	2201 Interest of corporation controlled by you
Brown Brothers Harriman & Co.	2502 Approved lending agent
Cr Partners Limited
Fbh Partners Limited
Li Shujun	2201 Interest of corporation controlled by you
Chengwei Evergreen Management, Llc	2201 Interest of corporation controlled by you
Cw Renaissance Holdings Limited	2101 Beneficial owner
Chengwei Capital Hk Limited	2201 Interest of corporation controlled by you
Chengwei Evergreen Capital, Lp	2201 Interest of corporation controlled by you
Renaissance Greenhouse Hk Limited	2101 Beneficial owner
Infiniti Trust (hong Kong) Limited	2301 Trustee
Sky Allies Development Limited	2306 Nominee for another person

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