Huisen Shares Group (HKSE:02127) ROC % : 3.01% (As of Dec. 2023)

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What is Huisen Shares Group 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 %. Huisen Shares Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 3.01%.

As of today (2024-06-02), Huisen Shares Group's WACC % is 5.51%. Huisen Shares Group's ROC % is 4.02% (calculated using TTM income statement data). Huisen Shares Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Huisen Shares Group ROC % Historical Data

The historical data trend for Huisen Shares Group'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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Huisen Shares Group ROC % Chart

Huisen Shares Group Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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30.12

34.44

48.12

9.88

4.09

Huisen Shares Group Semi-Annual Data
	Dec17	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial							51.16	23.43	2.45	4.51	3.01

Huisen Shares Group ROC % Calculation

Huisen Shares Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	245.315 * ( 1 - 18.58% )	/	( (3563.547	+	6194.23)	/ 2 )
=	199.735473	/	4878.8885
=	4.09 %

where

	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	))
=	6369.842	-	231.365	-	( 2574.93	-	max(0, 613.369	-	4753.773	+	2574.93	))
=	3563.547

	Invested Capital		(A: Dec. 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	))
=	7256.453	-	541.196	-	( 521.027	-	max(0, 1390.09	-	3546.452	+	521.027	))
=	6194.23

Huisen Shares Group's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	266.168 * ( 1 - 35.93% )	/	( (5148.846	+	6194.23)	/ 2 )
=	170.5338376	/	5671.538
=	3.01 %

where

	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	))
=	6511.981	-	351.843	-	( 1011.292	-	max(0, 743.965	-	3758.322	+	1011.292	))
=	5148.846

	Invested Capital		(Q: Dec. 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	))
=	7256.453	-	541.196	-	( 521.027	-	max(0, 1390.09	-	3546.452	+	521.027	))
=	6194.23

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

Huisen Shares Group (HKSE:02127) 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, Huisen Shares Group's WACC % is 5.51%. Huisen Shares Group's ROC % is 4.02% (calculated using TTM income statement data). Huisen Shares Group 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.

Huisen Shares Group ROC % Related Terms

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Huisen Shares Group (HKSE:02127) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Furnishings, Fixtures & Appliances » Huisen Shares Group Ltd (HKSE:02127) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

HHIGF:USA

Address

Huisen Road, Daluo Industrial Park, Longnan Economic Technology Development Zone, Jiangxi Province, Longnan, CHN

Website

http://www.jxhmgroup.com

Huisen Household International Group Ltd is principally engaged in the manufacturing and selling of panel-type furniture, upholstered furniture, sport-type furniture, customized furniture, and furniture ornaments. The company offers comprehensive manufacturing solutions to its customers, with the capabilities to design, develop and manufacture functional and economical panel furniture, upholstered furniture, and other furniture such as outdoor furniture and sports and recreational equipment. The company is also engaged in the manufacture and sale of hardware furniture and furniture ornaments. The company generates the majority of its revenue from panel-type furniture.

Executives

Pure Cypress Limited	2101 Beneficial owner
Zeng Ming	2201 Interest of corporation controlled by you
Zeng Ronghua	2202 Interest of your spouse
Goh Siok Teng	2201 Interest of corporation controlled by you
Yggies World Pte. Ltd.	2101 Beneficial owner
Kwok Hong Yiew	2201 Interest of corporation controlled by you
Kwok Properties Pte. Ltd.	2101 Beneficial owner

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